The International Monetary Fund on Thursday issued a clear warning to the Greek government against its plans to reintroduce collective labor negotiations, saying that such a move would put the competitiveness of the Greek economy at risk.
The IMF’s observation, included in its Article IV report that is not only about the Greek economy but concerns eurozone financial policies in general, comes almost a month before the party the government intends to stage for the end of the bailout program.
The IMF intervention is particularly important for two additional reasons: first because it concerns a key dimension of the post-bailout government narrative, and second because the IMF is not an independent observer, as its technical experts will be conducting a considerable number of visits to Greece in the context of the post-program surveillance, and will prepare two assessment reports on the Greek economy every year.
There is also a third and possibly more important factor that adds to the significance of the IMF recommendation: It may be just a taste of the attitude the Fund will adopt toward Greece should the government implement its plans to increase the minimum salary. This may actually be an intervention with a preventative character.
The government has already legislated the return from August – after the program ends – of two main principles in collective labor negotiations: the provision for the extension of collective contracts and the principle of the more favorable regulation.
On the labor matters, the IMF is also asking Greece to maintain the reforms implemented in the labor market and adopt the legislative changes required so that it is in line with European Union best practices on the institutional framework concerning group layoffs and lockouts.
The Fund further calls for the implementation of the recommendations by the Organization for Economic Cooperation and Development against any regulation hampering Sunday shopping, and for the acceleration in the opening up of “closed-shop” professions, especially engineers, lawyers and notaries.