Greece?s workers unions have indicated that they are unwilling to agree to a reduction in the minimum wage and private sector salaries despite demands from the country?s lenders to do so.
Yiannis Panagopoulos, the head of Greece?s private sector umbrella union GSEE, said that Greece?s competitiveness was not being affected by the level of wages and that his union would not agreed to the minimum rate (just over 750 euros gross) and to the 13th and 14th monthly salaries being reduced or scrapped.
The head of General Confederation of Greek Small Businesses and Traders (GSEVEE) Dimitris Asimakopoulos said that he was unwilling to change the terms of workers? collective contracts and would resist an attempt by the government to do so through a change in labor laws.
?To reduce the minimum wage and to do so by ignoring the process of negotiation between workers and employers is a crime,? he said.
The head of the National Confederation of Greek Commerce (ESEE) Vassilis Korkidis suggested that there was an element of revenge in the demands by the EU and the IMF for changes in the wage structure.
Prime Minister Lucas Papademos told union leaders on Wednesday that Greece might have to reduce its minimum wage and private sector workers could have to accept severe salary cuts as part of the reforms needed to secure funding without which the country is likely to go bankrupt by March,,
It was the first time since the economic crisis began that the issue of both the minimum wage and private sector salaries were laid on the negotiating table. So far, unions have sought to protect changes to both, although in reality thousands of private sector workers have seen their wages reduced over the last two years.
?We will have to accept limited sacrifices to prevent a catastrophic outcome — we have to give a little now so we do not lose a lot,? Papademos told representatives GSEE, ESEE, GSEVEE and the Hellenic Federation of Enterprises (SEV).
?It is my duty to inform you of the country?s real situation? these changes are not only necessary so we can get the next loan installment but in order to rebuild our economy and to restore lost competitiveness and fiscal stability,? said the prime minister.
Papademos made it clear that Greece?s competitiveness is not just dependent on wage levels — he mentioned other factors such as the country?s public administration, infrastructure, corruption and the quality of goods and services — but said that unions and employers would have to come to new agreements. Apart from the minimum wage, he indicated that the 13th and 14th monthly salaries that most private sector workers receive would have to be re-examined.
The interim prime minister also suggested that automatic pay rises would have to be scrapped and that labor laws would have to be simplified.
Papademos said employers and unions would have to agree this month as Greece is under pressure from the European Union and the International Monetary Fund to carry out structural reforms that would secure further loans.
?Without an agreement with the troika and the ensuing funding, Greece faces the threat of a disorderly default in March,? said the premier.