New cuts to minimum wages, collective labour contracts

17 June 2016
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The Supplementary Memorandum of Understanding sent to the Greek government lays out a series of actions it needs to implement. The document provides that the Greek government will have to introduce changes in the pension system, the social security and the labour force market by Autumn, while particular attention is given to the need for aligning labour force laws with best European practices, including the issue of large scale lay-offs. The report points out that 3 per cent of GDP will be saved until 2025 due to the measures implemented from 2015 till now. The institutions insist on the demands they put forward during the negotiations with the Greek government, which include among other things the abolition of the favourable status for small businesses in areas with a population below 2,000, the abolition of the exemption for farmers to pay less health contributions and the decrease of concessions for scientists the first five years in the workforce. Top priority is given to the complete implementation of the Minimum Guaranteed Income till October, while the document also requires the change of family benefits and disability pensions until September with increasing public expenditure. On the matter of labour, the aim of the new program is to maintain the progress achieved so far, including combating unemployment and more labour market flexibility. The institutions ruled out the prospect of the government changing the current framework of the collective labour bargaining. The current main pensions will freeze until they equal the new pensions that are calculated based on the new unified regulations. Finally, Social Solidarity Pension (EKAS) will gradually be scrapped by December 2019 starting at the top tier of the beneficiaries.

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