The clash between banks and the Greek Federation of Bank Employees’ Unions (OTOE) has caused serious upheaval in the banking sector.

Tension could well spill over into the private sector as negotiations between the General Confederation of Greek Labor (GSEE) and the Federation of Greek Industries (SEV) are not going well. Responding to the industrialists’ refusal to raise wages by more than 2.8 percent, the workers’ union has called a general strike.

Of course that’s all part of the game. But extreme caution is needed on all sides because too much of a confrontational climate could lead things to spin out of control and fuel social tension. Both camps must be flexible in negotiations.

The labor peace of the past few decades has been a fundamental factor of social cohesion and economic growth. It is a significant accomplishment that employers, employees and the state must do everything to protect. To be sure, that does not mean barring the different camps from promoting their interests. Nor does it mean the abolition of all confrontation. However, all sides must show a certain degree of self-restraint when such precious goods are at stake.

The reason we mention all these is that the encounter in the banking sector is on the verge of getting out of control. What the sector needs is a sincere dialogue with the aim of modernizing traditional institutions without damaging labor consensus.

Any discussion on income policy ought to take into consideration the stamina of the Greek economy. Fiscal instability has put Greece’s economy under EU supervision. Over the past five years the economy has been constantly losing ground in the crucial competitiveness arena. To be sure, the state, union leaders and entangled businessmen are not without blame.

The conclusion is that income policy must be hammered out with a sense of responsibility by all social partners so that workers can fulfill their demand to increase purchasing power without harming the competitiveness of Greek products and services. Pay raises must be compatible with the economy’s limits.