The Greek Panhellenic Socialist Party Government (PASOK) passed a new law that guarantees greater job security for those on part-time, dependent, temporary, short-term and agency workers in May 2010. It also includes new measures that require employers to engage and consult trade unions before any layoffs are implemented. They will also be subjected to fines of up to €50,000 if they do not turn up or engage with the Greek Labour Inspectorate.
Thus, in the midst of an economic crisis the Greek government, in conjuction with the social partners have opted to reduce not increase flexibility in the labour market. This is completely at odds with the policy prescriptions being proposed by some EU commissioners, the IMF and the OECD. It is also at odds with a change in policy focus by the Irish Dept of Enterprise, Trade and Innovation. The Irish government has signalled that it intends to increase flexibility in the labour market in order to stimulate employment. It has proposed mesures including the weakening of Registered Employment Agreements (REAs) for low paid sectors of the economy. It has also postponed and waterdown a series of EU directives aimed at protecting temporary agency workers.
What explains this difference between the Greek and Irish government? A whole variety of factors. But, most importantly, politics explains the difference. The Greek PM (who is chair of the Socialist International) does not believe that protecting employees and decreasing labour market flexibility will impact upon overall economic performance. If the German case is anything to go by, he is probably right. The embedded collective bargaining and coordinated labour market regime (as opposed to a market oriented regime) has contributed to the German recovery, not least by ensuring minimal levels of unemployment but also through coordinated wage restraint in its export (primarily metal working and electrical) sectors.