Greece will tell its creditors it cannot comply with labor reforms demanded by the International Monetary Fund as a condition of its support for the country's third bailout, its labor minister told Reuters in an interview on Wednesday.
Greece's leftist government considers the IMF's demand as a ban on the right of workers to negotiate wages and conditions on a collective basis. A breakdown with the IMF on the issue could jeopardize its financing of the 86 billion euro (72.75 billion pounds) bailout and could undermine overall confidence in the deal.
Labor Minister George Katrougalos, speaking a few hours before talks with the heads of an EU-IMF mission over Greece's bailout progress, said Athens would fight to preserve collective bargaining and described the IMF as "an extreme player."
"We want to reinstate collective bargaining because it's the core of the European social model," Katrougalos said. Under previous bailouts, collective bargaining was weakened.
Both the EU and IMF say an inflexible labor force has helped to make Greece uncompetitive, contributing to its economic malaise, but sources close to the lenders say the IMF is especially opposed to any attempt by Athens to restore the old collective bargaining system.
Other issues that lenders have put on the negotiating table include relaxing laws on mass dismissals and allowing employers to shut down their businesses and lockout workers in the event of industrial action, he said.
"These are measures which employers have already rejected in Greece," Katrougalos said. "We've reached a point where we can no longer tolerate the deterioration of Greek workers' state."