Reuters — Greece will tell its creditors it cannot comply with labour reforms demanded by the International Monetary Fund as a condition of its support for the country’s third bailout, its labour minister told Reuters in an interview on Wednesday.
Athens considers the IMF’s demand as a ban on the right of workers to negotiate wages and conditions on a collective basis. A breakdown with the IMF on the issue could jeopardise its financing of the 86 billion euro bailout and could undermine overall confidence in the deal.
Labour Minister George Katrougalos, speaking a few hours before meeting with the heads of an EU-IMF mission on labour issues, said “We want to reinstate collective bargaining because it’s the core of the European social model.”
Both the IMF and the EU say an inflexible labour force has helped to make Greece uncompetitive, contributing to its economic malaise.
Katrougalos also said the minimum wage in Greece, now at 586 euros, should be determined by social partners – workers and employers – and not by the state, as demanded by the lenders.
Other issues that Greece’s creditors have put on the negotiating table include relaxing laws on mass dismissals and allowing employers to shut down their businesses and lock out workers in the event of industrial action, he said.
A report on labour reforms by a committee picked by Athens and its lenders, expected by the end of September, will be key in the upcoming talks, Katrougalos said.
He added that he would seek assurances from the lenders that the committee’s conclusions would be respected and that he would present a July statement by employers backing the government’s stance – a move which the EU has endorsed in other countries.
“I insist that the IMF is an extreme player in this negotiation because its position does not reflect the body of European law,” he said.
“Those who want to save Europe can no longer implement such practices.”
An IMF spokesman in Washington said the Fund could not comment while its staff are conducting a review of the country.
The IMF’s mission chiefs arrived in Athens this week to assess progress on reforms under its first bailout review before releasing a further 2.8 billion euros in loans.
Despite the hurdles, Katrougalos said he expects the second review to be concluded by early November.
