Aside from the recurrent question of setting an adequate level of primary budgetary surplus, the re-establishment of the collective agreements at national level is a serious issue to Greece and its creditors and a major stumbling block in the path of the finalisation of the second monitoring mission on third Greek bailout plan, which was hoped for by the end of this year.
On the strength of better economic and budgetary performances than anticipated, the Greek government, led by the radical left-wing movement Syriza, intends to change legislation on the employment market. It wishes to return to the collective agreements shelved in previous bailout plans to effect. The aim is once again to allow the agreement that is the more advantageous to workers to apply when agreements exist at both national level and for the individual sector of activity.
On this issue, we have a real difference of opinion with the creditors, a senior Greek diplomatic source said on Tuesday 22 November, reiterating that the collective agreements are used to redistribute growth more fairly.
The opposition of the creditors is reported to come mainly from the IMF, which has still to decide on whether to come on board with the third Greek bailout plan, whereas the European Commission has taken a more conciliatory tone on this issue. On a visit to Athens this summer, the president of the European institution, Jean-Claude Juncker, and the Commissioner for Economic Affairs, Pierre Moscovici, took a position in favour of respecting workers' rights (see EUROPE 11596 and 11577).
In its Autumn forecasts, the Commission predicted growth of 2.7% in GDP for Greece in 2017, whilst the Greek economy was still expected to be in recession in 2016 (-0.3%). In nominal terms, the Greek government deficit is expected to stand at -1.0% of GDP in 2017, following levels of -2.5% in 2016 and -7.5% in 2015. The Greek bailout plan requires Greece to return a primary budgetary surplus (not including servicing of the debt) in line with the following trajectory: 0.5% of GDP in 2016, 1.75% in 2017 and 3.5% in 2018 and onwards. This is a point on which the IMF, which is more pessimistic in its economic forecasts than the Commission, is refusing to budge.
Compliance with all terms of the agreement. Stressing that his country was keeping to all of its commitments in terms of budgetary policy and reforms, the senior Greek official called for the agreement reached in May between Athens and its creditors (see EUROPE 11557) to be applied in full, including the question of government debt relief by means of short-term measures, which the European Stability Mechanism is currently finalising ahead of the Euro group meeting on Monday 5 December (see EUROPE 11662). On the question of the debt, the IMF is on the side of the Greeks for once, whilst the countries of the north of the Eurozone have their doubts.
"There is no reason to depart from the agreement. Obviously, we understand the internal political situations in the member states. But the finalisation of the agreement cannot wait for the elections in Germany" (September 2017: Ed), the diplomat stressed. He declined to express any preference between a green light over the collective agreements and obtaining relief measures for the Greek debt. (Original version in French by Mathieu Bion)