EU AND IMF CONDITIONALITIES: THE FATAL BLOW TO THE GREEK WORKING RIGHTS

9January 19, 2018

LEONIDAS VATIKIOTIS

The main question that had prevailed in Greece until 2015, before the years of cynicism which started along with the governance of SYRIZA and the far-right party of Independent Greeks, was whether the adjustment programs had succeeded or not.

The “denials” characterized them as inefficient and aimless, judging their effectiveness by the achievement of their nominal aims; Looking for example at the size of the public debt, the Greek rescue should be taught in student amphitheatres as an epic failure. The greek sovereign debt was at 115% of the GDP in May 2010, before the beginning of the rescue programs. Now, a few months before August 2018, when the third program will be completed, the debt has reached 181% of the GDP. The preliminary report of the Truth Commitee on Public Debt -formed in April 2015 by the Greek Parliament, audited the sovereign debt and argumented that it should not be paid- concluded that prioritizing the rescuing of private creditors and neoliberal reforms, would have a negative effect on the debt sustainability.

Almost the same path is being followed repeatedly in every program, by all the governments and political parties which have undertaken the responsibility of this open-ended shock therapy since 2010. Why though, if the policies were moving towards the wrong direction, didn’t they correct them? Whilst even the IMF has officially recognized the fallacy of this policy.

At the very same time, the greek politic and economic elite (through the industrialists’ or the bankers’ union) never expressed any objections or hesitations to the conditionalities accompanying every Memorandum of Understanding (the agreements with the creditors) or the guidance of the midterm evaluations. The application of conditionalities agreed will last decades after the official ending of the current program. For instance: the primary budget surplus will have been reached until 2060, yet the Greek Privatisiation and Investment Fund that has the aim to gather 50 bn. Euros from privatisations will remain active for 98 more years.

To check the success of the programs of economic adjustment we can just watch the modifications they caused in labour laws and labour relations. What happenned in Greece can be compared to what happenned in Eastern and Central Europe during the transition from the so-called existent socialism to capitalism. In fact, the political boundaries of “Eastern Europe”, countries where the post-war achievement of the working class’ movenent have declined, have reached the Mediterranean Sea.

[1] According to data of the budget for 2018, published in December 2017.

[i] The IMF and the Crisis in Greece, Ireland and Portugal, Independent Evaluation Office of the International Monetary Fund, 2016. http://www.ieo-imf.org/ieo/fil…

THE ABSOLUTE PAY CUT

FIGURE_1_wages_gr_oecdThe most glaring answer to the fundamental question on the success of the terms of the loan agreement can be found in the wage evolution. According to OECD, the annual average wage for 2016 (25.124 USD) was lower than the equivalent of 2000 (25.909 USD). The greek working class has returned to the 20th century, under the control of creditors. Given that all these years, wage and social inequality has increased sharply, we can suppose, with accuracy, that the living conditions of the lower income group are much worse, since the average indexes have become less representative. In the age of extremes, the average is misleading.

The uprecedented reduction on real wages is also depicted at the Eurostat figures, where it is apparent that labour cost per hour in euros, has decreased from 16.7 in 2008 to 14.3 in 2016. There’s only one more country where the wages have been reduced during the years of the Memoranda: Cyprus; from 16.7 euros in 2008 to 15.8 in 2016. but yet, the reduction there (-5.4%) was much lower that the one on Greece (-15%). at that time, the wages in EU have steadily increased from 21.5 to 25.4 and in the Eurozone from 25.3 to 29.8.

It seems natural that a “sinking” economy would come along with decreased incomes. However, there is a difference in this case: the wages did not decrease only because of the “sinking” economy but also because the laws changed. For that, the wage share declined more than the national product. The wage share as a percentage of the GDP decreased from 61.1% in 2010 to 56.7% in 2015. The unemployment reached 27% of the labour force, the highest level in the EU.  In other words, the crisis didn’t lead to a symmetrical reduction of salaries and earnings. The crisis, and especially the conditionalities of the rescue loans, altered the balance between the working and the ruling class, deteriorating the fromer’s conditions.

This well synchronized “attack” was not just a spontaneous reaction of the bosses. The second Memorandum, signed in February 2012 by the appointed government of technocrats, included among others, the reduction of basic salaries by 22% and by 32% for the youth under 25, as a strict precondition for the restructing of the sovereign debt. In the same law, one can find two articles that abolish the collective bargaining system between the government, employees’ associations and trade unions and also prohibit any kind of wage increase until the unemployment rate reaches 10% (20.5 in September 2017). Between 2010 and 2012, other conditionalities had imposed the abolition of the 13th (one salary during Christmas), of the 14th salary (half given for Easter and another half for summer vacation) and of many extra bonuses given by the employers.

i] Hourly labour costs ranged from €4.4 to €42.0 across the EU Member States in 2016. Eurostat news release, 58/2017, 6 April 2017.

[ii] Statistical Annex of European Economy, European Commission, Economic and Financial Affairs, Spring 2017. Wage costs. Adjusted wage share; total economy; as percentage of GDP at current factor cost, page 72.

OPTIONAL PAYMENT: EXPLOITATION HEAVEN

The state of pay cuts mentioned above was a green light for employers allowing them to implement “medieval” working conditions. Even now that the official data show a return to positive rates of growth, one out of three employees is not paid regularly; they’re either not paid at all, or paid with a few months delay, or receiving part of their wage with the hope of the remaining amount. Apparently, there are supermarket companies that are paying their personnel in vouchers, making them spend the salary back in the firm.

The systematic and continuous degradation of the labour wage has appeared even in the figures of the relevant Ministry. Concretely, in September 2017, while a party wanted to be called “left-wing” was in power, there were 126.956 employees with a salary of under 100 euros, which means that they are being paid 5 euros a day when the cheapest cinema costs 7 euros, the cheapest theatre 15 and an espresso more than 2 euros.

Another form of deregulation of labour laws that adjustment programs brought is the undeclared work. According to ILO, it reached 40.5% of the labour force at the end of 2013 from a share of 29.7% in 2010, showing that the brutal neoliberal reforms were going hand by hand with the absolute deregulation of labour. Ever since, all ministers, along with the Troika, have declared war to undeclared work. It’s a war which remains in the documents and never takes a substantial, real form. The underlying problem is the permanent lack of personnel and resources in the state agencies that have the responsibility to oversee the laws’ enforcement.

The fact that the Memoranda were a turning point for the history of exploitation in Greece has also appeared in official figures were every kind of precarious job (part time, seasonal and temporary) has every month, quarter or year a larger share than the permanent jobs. That means that the majority of the hiring is flexible and under-paid, identical to working poverty!

NEXT STEP: THE PROHIBITION OF STRIKES!

Contrary to the wave of high expectations that the government is fabricating, the future is much gloomier. The IMF has requested, and the greek PM Alexis Tsipras accepted in a letter to IMF Managing Director Christine Lagarde, in July 2017, to change the terms of workers’ strike. Being a precondition for the closure of the current evaluation, the majority of the Greek parliament will vote that a sine qua non precondition for announcing a strike by a trade union will be the accordance of the absolute majority of its members. Anyone can imagine what would happen if this rule was applied in the elections for the European Parliament, where less and less people are voting and the last elections turnout was just 42.61%.[i] In addition, everyone can imagine what would happen in every parliament if this rule had been adopted: no laws would be voted! However, the IMF and  the EU organize these democracy contests at the expense of the working class.

Instead of conclusion: Everyone knew what the IMF conditionalities meant for labour rights, but the experience showed that the EU is even more aggressive than the IMF, often representing genuinely the interests of the Greek economic elite.

Πηγή: Slug, Debt Justice Network Norway

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