Second review with “Troika” marked by numerous disagreements

The first meeting between the institutions and Greek Labour Minister George Katrougalos ended on Sunday, and despite its exploratory nature it became apparent that the two sides remain entrenched in their positions on the issues of mass layoffs and minimum wage. The IMF is pushing for mass layoffs and a further decrease of the minimum wage, while the Greek side hopes to “isolate” the Fund as holding extreme positions, by using the Expert Committee’s findings on the matter and the support of the European Parliament.

Katrougalos set the abolition of wage disparities for under-25 employees, claiming to it contravenes EU legislation stemming from the social charter. “Each side set their limits. The first meeting was to get to know each others’ positions. The extreme player adopted an extreme stance”, Katrougalos commented after the first meeting. He added that Greece reluctant to reopen matters that had been decided upon by court rulings, referring to the lenders’ demand for the abolition of unilateral appeal to the Organisation for Mediation and Arbitration (OMED).

The Fund expressed its objections on the reintroduction of the collective bargaining system, claiming it was outdated and contributed to “corporatism”. The institutions also opined that the trade union laws would need to be reformed. Discussions are scheduled to continue on Tuesday with the technical teams from both sides, while the institutions are expected to meet with the Deputy Labour Minister, Theono Fotiou on the issue of restructuring the social welfare and the “Social Solidarity Income”.

Katrougalos admitted negotiations will be tough, as the EU partners desire the IMF to remain part of the Greek program, while the creditors appear reluctant to accept the Expert’s findings, something that might set the whole negotiations back to square one. The four main points of contention between the two sides remain the mass layoffs, collective bargaining, minimum wage and the lockout.