Greece’s private-sector umbrella union, GSEE, and the country’s business groups agreed on Thursday to form a common front to oppose wage cuts, a move that could set them on a collision course with demands made by Greece’s international creditors.
Following a meeting of more than three hours, the union and Greece’s three employer groups said they would send a joint letter inviting the government to join discussions on other ways to reduce costs to businesses with the aim of boosting the country’s competitiveness.
“There is a common agreement among the social partners,” said GSEE president Yannis Panagopoulos in a news conference. “The government is obliged to respect that, and must push our creditors to respect it too.”
The talks come amid pressure from Greece’s so-called troika of international creditors–the European Commission, the International Monetary Fund and the European Central Bank–who have demanded Greece take steps to liberalize its labor market.
Specifically, the troika has called on Greece to consider abolishing its minimum wage and eliminating the two months of bonus pay workers now receive under the country’s national wage pact.
But GSEE has refused to countenance any wage cuts or renegotiation of the wage pact, which runs through the end of 2012. Employers’ groups, as well as many economists, fear that cuts in private sector wages will only deepen the country’s ongoing recession and, indirectly, hamper its efforts to narrow the budget deficit.
(source: Dow Jones)
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