Talks held on Friday between Unions, Employers and the provisional government in Athens failed.
The issues brought up in negotiations were collective bargaining, the time of expansion of a collective agreement and wages. Some of the terms of the new bail out agreement signed in February, both by Social Democrats and Conservatives, included an abolition of collective bargaining in the private sector and a 22% cut in the minimum wage (32% for those under 25).
In addition, the agreement cancelled “metenergeia”, the law that made it obligatory for a business to respect a collective contract up to 6 months after it had expired.
With the abolition of “metenergeia”, the only contract businesses have to respect is the National Collective Contract which embodies minimum wage and basic workers’ rights. The law also gives the right to businesses to alter the content of a contract, even if the employee does not agree.
The meeting took place in the Ministry of Labor and Social Insurance under Mr Roupakiotis, Minister of provisional government.
His proposal was to sign an agreement that there would be no cuts in wages and that collective bargaining should continue to exist.
Head of the Union of Greek Workers, the largest confederation of Unions of the private sector, Mr. Panagopoulos, declared that the proposal was not practical and that “laws can be cancelled with other laws”.
He also stressed the need to take the issue to the relevant Parliamentarian commission, so that the government formed after the elections will have to take the agreement into account. The Confederation of Employers asked that cuts in wages should be avoided and collective bargaining should remain. He also pointed out that there should be cuts in employers’ contribution to social insurance. Up to now, employers pay 32% of net wage as their share of the contribution to the pension funds.
What that really means is that since no agreement was achieved, 6 months after the end of existing collective agreements, businesses will only have to respect the new minimum wage which is formed at 585 euro gross or 504 euro net. For those under 25 it is going to be even lower.
Also, that means cuts in wages will become vicious since competition between employees will be fierce with an unemployment rate of 21%. Mr Venizelos, the leader of the Social Democrats, revealed that it was SEV, the Confederation of Employers, which put pressure on Troika to abolish collective contracts and ask for a lower minimum wage.
SEV denied that and repeated their view that minimum wage should not be cut. Reality, though, contradicts SEV.
The last two years have seen dramatic falls in wages in the private sector, especially for younger employees.
Even before the second Memorandum, most young employees were forced to accept wages of 500 euro or even 400 euro sometimes, something completely illegal at the time. SEV officially asks for zero cuts in wages while at the same time its members are asking to renegotiate contracts and impose the minimum wage.
The lack of strong unions in the private sectors makes cuts in wages easy. Therefore it has no reason to ask for permission to do what it is already doing.
On the contrary it makes perfect sense to ask for cuts in employers’ social insurance contribution…this way pension funds will have even less money and private pension funds will be more competitive. Mr. Samaras, the Conservatives’ leader, said that if he is elected he will renegotiate wages and collective agreement with the IMF.
A relevant question would be why he did not do it when his party was in government or why he voted in favor of the agreement. The answer is simple; now, elections are coming.
Will this make Greece more competitive? Not at all. It will cause an even worse depression as it will hurt demand. Additionally, it is not high wages that make the Greek economy noncompetitive. Red tape, oligopolies and monopolies, an unstable tax regime, corruption and zero investment in technology makes the Greek economy uncompetitive. Lowering wages will only make the rich richer and the poor poorer, preserving Greece as one of the most unequal countries in the EU.
(Sources:tvxs, ergasiaka-manamar)
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