ECONOMY

Unions fire opening shots on hot issues, threaten walkout

Greek labor unions yesterday called on the government to seriously reconsider the philosophy and content of the state budget and threatened to walk out of scheduled talks on social insurance reforms unless they are given guarantees that the state will meet its current obligations to finance the crumbling social security system. «The unequal distribution of income and taxes to the detriment of wage earners and pensioners has become the most serious structural problem of the Greek economy,» the General Confederation of Greek Labor (GSEE) said in a statement after a plenary session. GSEE noted that the government’s 2008 draft budget was based on an increase in taxation of -5.97 billion, coupled with a reduction in the growth of public and social spending. Total tax revenue was up 12.3 percent in comparison to 2006, with new and indirect taxes rising 13.8 percent to total -3.96 billion. «The curtailment of public spending in key sectors of the Greek economy such as social insurance, health, education and employment, makes it more difficult for economic and social policy to provide a dynamic response to social requirements and address social inequalities in the country,» GSEE said. It noted that the budget’s public investment program remained steady as a percentage of gross domestic product (GDP), at 4.1 percent, and, if account is taken of the recent 9.6 percent upward revision of GDP, has in fact shrunk. GSEE said the unions attach great importance to the state funding of social security funds. It added that the current social security law required the government to contribute -3.38 billion to the Social Security Foundation (IKA), rather than the sum of -1.90 billion earmarked in the budget, if it is to honor its 1 percent of GDP obligation. GSEE said it would stage a nationwide, 24-hour strike on December 12 to back its demands and would pursue the same demands in negotiations with employers in December for a collective wage agreement for 2008, where it will be pressing for pay increases of 10-10.5 percent for the lowest paid in the private sector. The umbrella union organization also said it would seek a safety clause against the impact on incomes from any unforeseen events, and that it would send employers a 40-page document with institutional demands.