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International corporations want a further cut in salaries

04 March 2013 / 15:03:39  GRReporter
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The level of salaries in Greece remains a major problem for the local government. Brussels and major international corporations are pressing for further reductions of the minimum salary in Greece, the main argument of the corporations being that when a high rate of unemployment is tormenting the country, the government should not put obstacles like a binding minimum salary to the creation of new jobs. On the other hand, the financial crisis in Europe and the loss of competitiveness have driven the leaders on the continent to take measures to reduce the production costs by starting with the salaries.

"The strategy of the European Commission over the past year and a half or two has been to reduce the labour costs in all European countries in order to improve the competitiveness of European companies over the rivals from Eastern Europe and Asia," Maria Damanaki, European Commissioner for Maritime Affairs and Fisheries, told To Vima FM radio.

Minister of Economy and Development of Greece Kostas Hatzidakis met last week with the managing directors of 11 of the largest international companies operating in Greece. Eight of the eleven managers supported the idea that a salary of 250 - 300 euro for part-time work could create new jobs. "I do not see why a minimum level of the salary should be maintained in a country where youth unemployment has reached incredible levels. Give us the opportunity to hire young people with less pay for fewer hours for three or four days a week," calls the executive manager of Barilla Hellas George Spiliopoulous.

The minimum salary for young people up to the age of 25 was reduced to 510 euro per month in 2012 from 740 euro until the middle of last year. The minimum salary above that age limit was set at 586 euro per month. Research carried out by GRReporter shows that many companies have become more flexible in applying the labour law. A young man who had graduated in informatics, aged 23, worked in a telecommunications company in six-hour shifts five days a week and received 280 euro. "I quit my job because my salary was enough just to be going to work and back. With the additional daily costs, it cost me more to work than to remain unemployed," said the young man.

The businessmen insist in turn, "The Greek market is dying. The funds that were promised to the real economy never came. We have to compete with the prices of the East. We are suggesting an idea, which will immediately reduce the absolute value of unemployment, mainly among young people, especially at a time when we often hear 'I want any job for any money.' "

Another problem, which the business community urges to be resolved, is the reduction of the time of notice for layoffs. Currently, this period is from three to six months and according to the representative of Nestle Greece, Raumond Franke, it is extremely long for the management. The amount of compensation the employees receive if the term of the notice is not met is two times higher than if the employer notifies them half a year earlier.

The government is willing to reconsider the issue of reducing the period of advance notice for layoffs in the private sector, but it has so far refused to negotiate the level of salaries. The recent changes in labour legislation have led to increased social tensions. Local analysts assess that additional cuts in 2013 could cause an escalation of protests and violence and recognize that the issue of the level of salaries should remain in the background for a while. Despite the lobbying by large corporations, Hatzidakis is adamant, "The government believes that the level of the minimum salary cannot fall further." Of course, the country's lenders, who are back in Athens this week for another inspection of the implementation of the recovery programme, will have the last word in Greek politics.

Tags: EconomyMarketsGreece.CrisisSalariesCuts
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