PM said to be ready to give in on labor reform to ensure debt relief

PM said to be ready to give in on labor reform to ensure debt relief

Prime Minister Alexis Tsipras is prepared to make further concessions to Greece’s creditors in tough negotiations that are currently under way to ensure that there is no delay in launching crucial talks on relief for the country’s debt burden, Kathimerini understands.

According to sources, Tsipras and his key ministers are ready to give in to calls by foreign auditors for more flexibility in the crucial area of labor laws. The government has already agreed to put off its demands for the restoration of collective wage bargaining, a key pledge of leftist SYRIZA before it came to power last year.

It is unclear to what degree the Greek side is willing to concede on other issues – such as calls by foreign officials for facilitating mass layoffs for struggling employers and making it harder for unions to call strikes.

A source at the Labor Ministry said over the weekend that the Greek side has submitted its proposals for changes to labor laws and is awaiting the reaction of foreign officials.

Tsipras is said to be set on a strategy of withdrawal despite the risks. The key danger is that cohesion in the ranks of leftist SYRIZA, which has already been tested by a series of concessions to foreign creditors, is further compromised, weakening the beleaguered coalition. The other risk is that the further concessions may boost the lead of conservative New Democracy over SYRIZA in opinion polls, which is already significant, thereby enhancing the sense that SYRIZA’s coalition with the right-wing Independent Greeks is on its way out.

But even the promise of debt restructuring is not a relief for the government, as there are fears that it may be linked to further austerity. There are fears that an ongoing disagreement between the European Commission and the International Monetary Fund regarding the country’s budget targets could lead to demands for further belt-tightening.

Over the weekend, ministers worked on finalizing the draft budget for next year, which is expected to be submitted in Parliament on Monday, and are preparing more legislation for the coming weeks containing a series of prior actions.

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