On BSkyB commenting on the troika's latest assault on Greek labour

You may have seen the leaked letter (see below for its contents and also read the Guardian’s report on the matter), authored by the troika and sent to the hapless Quisling-like Greek government. In this interview I was given a brief ‘window’ of an opportunity to discuss its contents and general ‘philosophy’.

Leaked letter from Troika to Greek Labour Ministry

Greece. Labor market reforms
 
1.      There should be no backtracking on recently passed labor market reforms. The mission welcomes the social dialogue as a means to consult with social partners, and to address the remaining challenges in the labour market. The labour reforms introduced in March, including the needed re-alignment of wage floors, need to be preserved well beyond the present round of social dialogue, and the government should act accordingly to ensure this.
 
2.      The government should take the next steps towards better functioning labour markets and employment creation (Table 1):
 
•     The framework for setting the minimum wage needs to be overhauled to help ensure that wage dynamics support full employment. After the measures taken in February to re-align wage floors, the objective—as agreed in the programme—should be to adopt a timetable for establishing a single-rate statutory minimum wage on a permanent basis legislated by the government after consultation with social partners. This system should provide a basic floor for labour income.
 
•     Non-wage labor costs and barriers to employment must be addressed to support competitiveness and alleviate the pressure on wages:
 
            The labor tax wedge should be reduced. Concrete measures should be proposed to reduce social            contribution rates by 5 percentage points in a fiscally-neutral manner (as envisioned in the second programme).
 
            Other non-wage labour costs which ultimately affect entry and exit costs should be reviewed and reduced, taking into account the effects of recent labor market reforms.
 
            Excessive regulatory burdens should be reduced, while regulatory effectiveness should be increased. These include cumbersome data reporting to and approval requirements from the labour inspectorate. A comprehensive strategy is needed to reform the labour inspectorate. A roadmap should be adopted and an independent assessment of Labour Inspectorate by international experts contracted, covering mandate, activities, structure and the enforcement and penalty structure for infringements of labour law (including undeclared work) consistent with the principle of proportionality. The government should be ready to promptly take the needed corrective actions soon after that.
 
            Work schedules can be made more flexible. Required actions include increasing the maximum number of weekly workdays, new modalities of working time and daily working hours arrangements and take up of annual leave. Revising labour legislation for specific sectors or professions within the context of product and service market reforms is necessary to help the latter reforms to succeed.
 
           Unemployment is too high, and policies are needed to prevent it from becoming structural. The ESF can provide resources which can be used to help integrate the unemployed into those economic sectors with higher growth potential. The procedures related to ESF schemes (i.e. those combining work and training together with the social work programmes) should be completed as soon as possible, with a view to begin implementing the schemes by end-September.
 
 
Table 1. Greece: Labor Market Reforms – Area: Wage setting
 
Measure:  Overhaul framework for setting the minimum wage:
 
•     Adopt a timetable for establishing a single-rate statutory minimum wage legislated by the government after consultation with social partners.
•     New system should provide a basic floor for labour income which ensures that wage dynamics support full employment.
•     Consultation with social partners should be on designing the mechanism, and must not lead to an increase in the minimum wage adopted under the EFF until unemployment rates are low.
 
Area: Non-wage labour costs – Measure: Propose measures to lower social security contribution rate for employers by 5 percentage points in a deficit neutral manner:
 
•     Adjust pensions (with protection for low-income pensioners).
•     Broaden the base for contribution collection.
Reduce administrative burden to employers and employees related to cumbersome reporting and preapproval requirements:
•     Remove existing requirements for submission of working schedules, notification and/or pre-approval by labour inspectorates of overtime work, compensatory work time arrangements, and rotational work.
•     Adopt a roadmap for the gradual increase of electronic record keeping and for reporting by employers to the Labour Inspectorate, with full digitization of relevant data on labour arrangements by end-2014.
•     Accept electronic signatures in electronic submissions to the Labour Inspectorate.
Review and reduce high entry and exit costs to bring them in line with the practice in other EU countries, taking into account the effects of recent labour market reforms.
 
Area: Flexibility of labour arrangements – Measure: Increase flexibility of work schedules:
 
•     Increase the number of maximum workdays to 6 days per week for all sectors.
•     Set the minimum daily rest to 11 hours.
•     Delink the working hours of employees from the opening hours of the establishment.
•     Eliminate restrictions on minimum/maximum time between morning and afternoon shifts.
•     Allow the consecutive two week leave to be taken anytime during the year in seasonal sectors.
 
Area: Effectiveness of Labour Inspectorate – Measure: Adopts roadmap and contracts an independent assessment of Labour Inspectorate covering:
 
•     Mandate, activities and structure.
•     Enforcement and penalty structure for infringements of labour arrangements (including undeclared work)

18 Comments

  • I don’t know the starting points and the targets, for instance “adjust pensions (with protection for low-income pensioners)”, which in itself doesn’t justify an outcry. It depends on the concrete numbers. Some of the proposals might make sense, I can’t judge.

    But in total, these recommendations by the troika sound like an ultra-neo-liberal’s wet dreams.

  • ultra-neo-liberal doesn’t even begin to describe the mentality of troika’s “suggestions”. I believe we need a new word to define.

  • It is remarkable to see how many german media, even “public service broadcasting” like ARD, do not tell us about this, yes, like Very Serious Sam has it, “ultra-neo-liberal wet dream”.
    I, you have to be always in up-beat mode, (I think) wrote politely to the ARD just to ask why they don’t report latest news like this “proposal for a 6 days’ week”. No answer, of course.
    It is always dangerous to draw conclusions here, but sometimes you start to think if not all things that would at last make “people who are not that much interested” think and think again – were not shown really much to the public. Of course there are a very few reports, but I would have expected a lot, lot more. Just checked again.
    There are things you wouldn’t have thought possible a few years ago.

    The left-wing “Junge Welt” has a big report about “exploitation without an end” with many detailed infos, but the paper is disregarded in Germany and is a drop in the ocean compared to the mainstream-media. This is just a sidenote, of course, but how could people even start to think the way it is now? First one shouts the senseless lies into the faces of readers (who still could think for themselves, yes, it’s true) – then you take it not so seriously to show the full picture. What’s the goal to have something like BBC or ARD if the german version is not showing the full picture…

  • If the West betrays Greece once more time than we need to be prepared and act before worst things happen. We need to learn from our past and be prepared to act rather than react and loose once more time.

    In order to do that we need to put aside all the ideological MALAKIES which our nation is suffering from.

    There should be just two parties: Either you are a good Greek or you better cover up your rotten ass. No fricken socialism, communism, capitalism, liberalism, conservatism, etc. etc.

    Our only alternative is Romanity, we need to go back to our own roots, we have more in common with other nations and other peoples.

    We need to think about leaving not just the Euro but also the EU and the NATO alltogether.

  • Reading the text of this Troika “letter” has nearly given me a heart attack.

    These so-called “measures” are amateurish, ignorant, dangerous and wholly political. They have not a shred of sense or policy or economic expertise in them, are written in an infantile language.

    Such an impoverished analysis is a disgrace to public service. An economics or business studies undergraduate would be savaged for presenting it.

    The European Commission and the IMF should be pilloried for presenting such a lousy third rate work product. The whole body of measures seems to have been written by a 1980s right-wing politician’s PR clerk.

    One example: one of the long term dilemmas for sustaining employment in the developed west has been the gradual increase in output per individual since WWII – i.e. fewer people are needed to produce the same unit of value as technical efficiency and economies of scale developed. So new sectors of the economy have developed (through invention, entrepreneurship, investment, new technology) to sustain economic health and prosperity. But all in a context of relative financial stability and confidence.This is the economic and social dynamic of our (until now) healthy participative western societies.

    But at a time of crippling unemployment in Greece, negative liquidity, when no investment is available and demand is dead, these Troika clowns want to lower the minimum wage and increase the per capita working week to 6 days… as a measure “to create more work”
    …..very clever

    A six-day week represents about another 52 job days lost per year as the longer per capita week displaces even more people from work and when employers are cutting back production/services, NOT because of wage costs but because nobody is buying their products and when investors are simply holding sterile cash out of pure animal fear.

    Makes one want to scream !!

    • The weekly working hours regulate the hours of work a person is expected to work. The number of working days provide the flexibility.

      Do some research which EU-countries have 5 or 6 working day weeks. I only know that in Austria and Germany, the working days go from Monday-Saturday. Does that mean everyone works on Saturdays? No way! On which days individual sectors work is regulated by collective bargaining agreements between the employers’/employees’ associations of each sector.

      The maximum working hours per week are regulated by law. I believe in Austria and Germany they are 38,5 hours (or 40 hours; I am not sure). In France, I believe, they are less.

      Thus, to make a lot of fuss about declaring the working week as a 6-day week is a lot of fuss within the European context. On the other hand, if the weekly working hourse were increased to 78 hours, as I read somewhere today, then that would definitely justify a lot of fuss. I am not sure that there is an EU-country today which has more than 40 working hours a week.

  • This explains much…..

    http://www.broadsheet.ie/2012/08/17/irelands-zombie-train/

    We bought these brand new Korean DMUs just before the crash but now they are empty and a waste of capital resourses …why ? Ireland is not a national economy….it is a conduit for the cores industrial systems.

    Private car energy use (SEAI)

    Y1990 : 926 KTOe

    Y2007: 2,070 Ktoe (peak)

    Y2011 :1,843 ktoe

    A big drop but it ain’t huge……

    Now let us look at Road freight energy use….

    Y1990 : 334 Ktoe

    Y2007 :1,255 Ktoe (peak)

    Y2011 :637 Ktoe……

    Road freight energy use has halved…..i.e. the ability to do work (building capital etc) has been pushed out by consumer oil consumption also in the oil home heating area withen Ireland.

    http://www.rte.ie/news/2012/0828/irha-hauliers-fuel.html

    Irish oil imports Jan – June…….+ total yearly oil imports expressed in Ktoe

    Y2012 : 2,709 Million Euros (latest est.)
    Y2011 : 2,628 Million Euros…………………….Y2011 : 8,776 KTOE
    Y2010 : 2,087 Million………………………….. Y2010 : 8,912 KTOE
    Y2009 : 1,574 Million Euros (price slump)……. Y2009 : 9,019 KTOE
    Y2008 : 2,545 Million Euros (collapse level ?)…..Y2008 : 10,386 KTOE
    Y2007 : 1,954 Million Euros……………………..Y2007 : 10,291 KTOE
    Y2006 : 1,936 Million Euros……………………..Y2006 : 10,793 KTOE
    Y2005 : 1,469 Million Euros……………………..Y2005 : 11,180 KTOE
    Y2004 : 972 Million Euros……………………..Y2004 : 10,184 KTOE
    Y2003 : 816 Million Euros……………………..Y2003 : 10,171 KTOE
    Y2002 : 757 Million Euros……………………..Y2002 : 10,476 KTOE
    Y2001 : 410 Million Euros……………………..Y2001 : 10,353 KTOE
    Y1998 : 303 Million Punts……………………..Y1998 : 8,886 KTOE

    We typically reexport 1000 -1600KTOE of oil a year so imports do not quite accuretly express our ability to do work but you can see from these figures we are paying more for less.

    Yearly oil primary energy supply gives a better feel for the situation in Ireland.
    As I said we are paying more for less ability to do work and also we have a higher population now operating in a credit hyperinflated envoirment where the input costs are greater.
    (oil)TPES(inc non energy)
    TPES Y2011 : 7,101 Ktoe
    TPES Y2010 : 7,690 Ktoe
    TPES Y2009 : 8,006 Ktoe
    TPES Y2008 : 9,243 Ktoe
    TPES Y2007 : 9,139 Ktoe
    TPES Y2006 : 9,305 Ktoe
    TPES Y2005 : 9,586 Ktoe
    TPES Y2004 : 8,931 Ktoe
    TPES Y2003 : 8,304 Ktoe
    TPES Y2002 : 8,719 Ktoe
    TPES Y2001 : 8,607 Ktoe
    TPES Y1998 : 7,278 Ktoe
    TPES Y1990 : 4,422 Ktoe

    The ability to print debt free money and subsidise the rail and bus system could do much to push out oil so that it could do some work rather then car consumption…i.e. build more rail & tram lines as the French are now doing………………(they know whats coming – we don’t……)
    But Ireland is a mere conduit , it is not a country in any real sense of the term…its one tiny cog in a gigantic satanic engine.
    Ireland is by far the most interesting lab rat in my opinion given its extreme credit nature and good data sets…..I am sure the powers that be will poke & tinker with its subject to see how different dynamics work their way through the domestic systems.

  • Words from Jesse’s Cafe Americain …

    “I do not believe at all that these measures are stable, practical, or given in good faith as a solution. In other words, they will be back for more. The capitulation on such draconian interference is the path to a parasitic existence, in the manner of the most servile type of colonialism.

    Greece might well consider a default on the existing external debts, the issuance of a national currency, reforming the financial system, the imposition of immediate capital controls, democratic safeguards against the rise of extreme domestic elements, and self-sufficiency at any and all costs in the spirit of a war time economy of a nation under siege.”

  • The latest Troika-proposed measures above break the existing EU Labour Conventions, and as far as I know, Greece has not yet left the EU.

    As the owner of a greek SME (small & medium enterprise), I should add that while these measures are principally designed to benefit multinationals, preferably in Chinese style Special Economic Zones – also under discussion for Greece – they ‘supposedly’ also benefit me.

    In actual fact the application of these measures would totally destroy my company and every other SME dependent on its so-called “human capital”.

    It is proven – and well documented – that companies investing in, and loyal to their employees, reap enormous benefits in higher productivity & improved efficiency. My company is an excellent example.

    Every small company & SME owner knows this – or foolishly ignores it at the eventual cost of company failure.

    Small companies rely first & foremost on teamwork and the loyalty and dedication of their staff. Apart from machines and equipment, our principle investment is always in our team, ie our employees. Teamwork relies on loyalty – a 2-way street between employers & employees. “Our” profits rely on the daily application of “their” skill and good judgement – we truly are “all in this together”.

    This is simple fact. And one reason that very few SMEs have labour disputes.

  • Professor Varoufakis

    In Greek mythology, Antaeus fell on the earth to get its strength. It seems to me, you are falling on confabulations to get your strength in intellectual argument. To insinuate or describe the Samaras Government as “Quisling” and the Eurozone as “fascistic,” not only clearly reveals your odium, rancour, and bias toward these two institutions but also the vacuity of your argument that needs scarecrows to sustain the latter in the minds of hoi polloi.

    I would dare make the prediction that if such proposal of the troika for a six day working week was put before Samaras, the latter would reject it with his characteristic manliness-which you hate-out rightly and resoundingly, and, hence your appellation of the “Quisling-like Greek government,” would be egg on your face.

  • Professor Varoufakis
    In Greek mythology, Antaeus fell on the earth to get his strength. It seems to me, you are falling on confabulations to get your strength in intellectual argument. To insinuate or describe the Samaras Government as “Quisling” and the Eurozone as “fascistic,” not only clearly reveals your odium, rancour, and bias toward these two institutions but also the vacuity of your argument that needs scarecrows to sustain the latter in the minds of hoi polloi.

    I would dare make the prediction that if such proposal of the troika for a six day working week was put before Samaras, the latter would reject it with his characteristic manliness-which you hate-out rightly and resoundingly, and, hence your appellation of the “Quisling-like Greek government,” would be egg on your face.

    • Mr. kotzabasis:

      You say “To insinuate or describe the Samaras Government as “Quisling” and the Eurozone as “fascistic,” not only clearly reveals your odium, rancour, and bias toward these two institutions but also the vacuity of your argument that needs scarecrows to sustain the latter in the minds of hoi polloi.”

      Let me ask you just one question: Do you really consider the Eurozone a democratic institution???

      You must be joking! Otherwise you must be suffering from loss of the sense of reality!

    • Greece is under a dictatorship. As Rothchild once said “I care not who governs, as long as I control the flow of money”… In the case of Greece, thats the Troika Vs the People. Greece needs to control its currency and in turn it will control political outcomes and the future of its citizens.

  • The imminent austerity measures are going to be very hard.
    Proposing these super extreme measures, are going to make the actual, and truly intended ones, seem softer.
    That’s what it’s all about.
    An old and well tested recipee.

  • I wouldn’t even want to imagine how it feels to read other letters from Troika to the Greek government that have not leaked! Greece is the ‘Big-Economic-Experiment’. They force new extreme regulations on an easy-to-manipulate victim. Greek labour is the new bargain opportunity for the future investors. Before Greece, it was Bulgaria, Romania, Letonia, and other east-block countries. Now, it’s Greece’s turn – but with a new receipt being tried out from the global financial cooks: a free fall from the sky without parachute!