ECONOMY

Government will not mediate in pay talks, economy minister says

Economy and Finance Minister Giorgos Alogoskoufis said yesterday, after meeting with union and employers’ representatives, that the government will not mediate in talks between the two sides on a collective wages agreement. With the talks barely started, the two sides are far apart. The General Confederation of Greek Labor (GSEE) is demanding an 8 percent wage rise and a reduction of the working week to 39 hours from the current 40, while the Federation of Greek Industries (SEV) is offering a 3.2 percent rise. GSEE has already called for a 24-hour general strike on March 31. GSEE President Christos Polyzogopoulos, a prominent member of the opposition Panhellenic Socialist Movement (PASOK), reiterated the union’s demands to Alogoskoufis. After meeting Polyzogopoulos and SEV Chairman and Executive President Odysseas Kyriakopoulos, Alogoskoufis made a general statement praising consensus politics. «Workers and enterprises play a crucial role in the economy. This first official meeting with the SEV and GSEE executives testifies to our intention to maintain an open line of communication with the social partners. Our economic policy is based on development, employment and social cohesion. We want our economic policy to be credible; we believe in consensus procedures and we acknowledge the role of the employed and businesspeople. We do not interfere with collective bargaining. we believe that a way will be found to both improve the workers’ lot and to shore up the economy’s competitiveness.» Kyriakopoulos said that SEV had talked mainly about issues concerning taxation and about the law on investment incentives, also know as the «Development Law.» Alogoskoufis has said that the new government will soon present a new development law, just months after the law passed by the outgoing Socialist government and which was highly praised by Kyriakopoulos. The revised law will take account of the new government’s promise to cut corporate tax on profits earned in 2004 from 35 to 25 percent. The current law provided the same cut, for a period of 10 years, as an incentive to investors willing to invest at least 30 million euros. Besides updating the incentives in the law to take account of the lower corporate tax, the government must also take account of the reservations expressed by the European Commission. The 30-million-euro level of investment effectively precludes the extension of incentives to small and medium-sized enterprises, which the EU sees as the motor of innovation and job creation. Christodoulakis also met yesterday with Development Minister Dimitris Sioufas, whose ministry oversees issues relating to industry, energy, trade and research and development. The two ministers agreed that greater coordination between their ministries was required and will appoint a coordinating committee headed by the ministries’ general secretaries. Next week, Alogoskoufis will meet with the European Commissioner for Economic Affairs, Pedro Solbes, to gauge the EU’s desire for a revision of Greece’s finances. With a lot of public spending still not showing up in the country’s deficit and debt, despite an earlier revision imposed by Eurostat, the government is pondering whether to reveal the full extent of hidden expenditure, thereby increasing budget deficits and the public debt and risking draconian EU-imposed measures. This would hamper the government’s ability to deliver on its many promises. It is already feeling the heat in that respect: People are already contacting the State’s General Accounting Office, demanding that the government make good on its pre-election commitments.