No convergence between ECB and Athens on collective labor contracts


In its monthly economic bulletin issued on Thursday, the European Central Bank came out in favor of individual labor contracts for staff at each company over sectoral bargaining, which Greece has been pursuing, within the framework of the European social model.

At a time when the government is seeking an “acceptable compromise” in order to see the second review through, the European Central Bank wishes to reverse one of the landmark claims of the Greek side.

Therefore, after the International Monetary Fund’s insistence against any backing down from the labor reforms implemented in Greece as a result of the previous bailout agreements, one of Greece’s European lenders is now expressing the view that collective labor negotiations have contributed toward the “inflexibility” of salaries in Europe and may have led to the worsening of job losses during the recession.

The European Central Bank additionally notes that any further reforms favoring the corporation-specific collective contracts could prove beneficial for eurozone states, as this might lead to a reduction in job losses. Frankfurt observes that without the sectoral labor contracts that force enterprises to apply a national, regional or sector salary policy, the adjustment of salaries to economic reality will be easier.

Greece is seeking some common ground with its creditors on the labor front in the hope that the representatives of the European institutions will be more amenable to the effort to abide by the European social model. It therefore insists on its arguments in favor of restoring collective labor contracts per sector.

At the same time, following the decision by the European Court of Justice on the issue of group layoffs, the government has stopped seeking ways to preserve the ministerial veto on layoff decisions, trying instead to set specific criteria according to which corporate decisions for group layoffs will be taken.