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Greek bailout talks hit sensitive labour reform negotiation

Euro & Finance

Greek bailout talks hit sensitive labour reform negotiation

Greek Minister of Labour Georgios Katrougalos.


The Greek government stressed that it will not sacrifice workers’ rights, even if offered a reduction in public debt, when Athens and its international creditors meet for sensitive talks on labour reform next week. EurActiv Spain reports.

“We are not willing to sacrifice Greek workers’ rights for anything – even a reduction in debt,” said Georgios Katrougalos, the Greek Minister of Labour, referring to the International Monetary Fund’s indication that debt relief could be offered in exchange for labour reform.

The labour reform negotiation is one of the most sensitive issues in the upcoming review of the third Greek bailout, which is due to start next Monday (17 October).

“I always say that Greece is the European country with the biggest deregulation of labour relations,” Katrougalos insisted.

The Labour Minister reiterated that the Greek government’s objective is to return to “the normal European level, in respect to the European social model”.

According to him, “The IMF’s stance reflects an extremist neoliberal position” that is incompatible with the European model. For Katrougalos, it is “unthinkable” that the European institutions, under pressure from member states like Germany, believe that the rescue programme cannot proceed without the IMF’s solutions being implemented.

In fact, he said it would be unacceptable for the institutions to implement solutions that the Council of Europe itself has ruled illegal.

Katrougalos also hoped that Athens, despite the IMF’s protests, will be able to restore collective bargaining following its elimination under the terms of the second bailout programme in 2012. This was one of Syriza’s main election promises back in 2015.

The minister added that a report published a few days ago by an international committee of experts will serve as the basis for negotiations to bring back collective bargaining.

Advisers at odds over Greek labour reforms ahead of bailout review

A group of advisers charged with helping Greece and its foreign lenders on labour reforms disagree among themselves on key issues, a draft report seen by Reuters showed, reflecting the complexity of talks which are due to start in mid-October.

Although in favour of the report, which backs up the government’s position, Katrougalos remained sceptical of the experts’ view that a more flexible labour market is advantageous, given that it would allow for more collective layoffs.

“We don’t intend to introduce more flexibility,” he said, adding that “half of the jobs created (since the Syriza government took power) are only part-time, precisely because flexibility already exists. So we don’t intend to bring in more flexibility”.

Katrougalos has found himself acting as a lightning rod for criticisms levelled at the government, following Syriza’s inability to follow through on promises made during the last election campaign, before January 2015.

This includes pension cuts, despite stating beforehand that such cuts had only served to exacerbate the crisis.

“Our position in regard to pensions, as well as wages, was that instead of cuts there should be increases,” the minister insisted, warning that the third bailout programme is only “prolonging austerity”.

He argued that in order to avoid “uncontrolled bankruptcy”, Athens was forced to strike a compromise that “no one was satisfied with” and that their election promise was an unavoidable casualty.

Pensioners made their anger towards the government known last week, as violent protests erupted in the Greek capital. The police responded with tear gas, in scenes reminiscent of the demonstrations that were commonplace under the previous conservative government.

Greece passes electricity market reform, sets sovereign wealth fund

Greek lawmakers yesterday (27 September) passed reforms sought by the country’s creditors to cut pension spending and expedite privatisations in exchange for financial aid under the country’s latest international bailout.

Katrugalos conceded that pensions are very low, but said that the government had done everything it could to “manage the situation as fairly as possible”.

He even said that “anyone protesting out in the streets to protect their rights helps us in government to show the IMF precisely why the policy of austerity is a dead-end”.

“We have accepted a neoliberal programme, but we have not transformed into a neoliberal nation,” he said.

Austerity-hit citizens allowed to sue troika, ECJ rules

The European Court of Justice has ruled that EU citizens can now sue the troika if they believe their fundamental rights have been violated by austerity. EurActiv Germany reports.