Labor reforms divide ruling party

Planned changes to labor relations and the pension system, which have provoked an outcry by labor unions and opposition parties, yesterday were also fueling tension within the ranks of ruling PASOK, sources told Kathimerini. Labor and Social Insurance Minister Andreas Loverdos reportedly received orders yesterday from Prime Minister George Papandreou to discuss with labor unions the content of a presidential decree that would make it easier for employers to dismiss staff and change the way that settlements to dismissed employees are paid. The decree, made public by Loverdos earlier this week, has already prompted the country’s two major unions to call a general strike for June 29. Papandreou, who flew to New York yesterday to chair a Socialist International conference, reportedly wants Loverdos to seek the greatest possible degree of consensus with unionists on the labor relations bill before it is submitted in Parliament. The decree is likely to be discussed in the House on Tuesday, sources said. It is then expected to be submitted for approval along with another controversial piece of legislation for the reform of the country’s near-bankrupt pension system. Several PASOK cadres were said to be skeptical about the need for such extreme changes so soon after the imposition of a raft of austerity measures including salary cuts and tax increases. According to sources, Loverdos met some of these deputies yesterday to listen to their reservations and did not rule out some of the changes they proposed, including the lengthening of the period of notice given to employees to be dismissed and giving more generous settlements for long-serving staff. It remained unclear whether a memorandum the government signed with the European Union, the International Monetary Fund and the European Central Bank to secure a 110-billion-euro loan leaves any scope for such changes to be made to the draft presidential decree.