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Greece: The Path From A Great Past To A Great Future
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Due to the present financial instability of the country, as a result of the excessive public deficit and the progressive inability to access the bond markets on realistic terms, as well as the global financial crisis, the Greek government was forced to activate the support mechanism under the EU loan agreement along with the involvement of the International Monetary Fund (IMF). The specific conditions on which this support mechanism was activated are included in the Memorandum of Understanding on Specific Economic Policy Conditionality signed in May 2010 between Greece and the IMF.

The Memorandum of Understanding had a serious impact on labor law in that the government, conforming with the Memorandum's provisions, modified the relevant legislative framework by reducing pay rates for overtime work, enhancing flexibility in the management of working time, amending regulations of the arbitration system, introducing minimum wages for groups at risk, such as the young and long-term unemployed, raising the minimum threshold for activation of rules on collective dismissals, (especially for larger companies), and by facilitating greater use of temporary contracts and part-time work. These changes, as well as changes in the national social security system, were met with strong reaction from the public, including prolonged and extensive strikes.

Due to the current financial crisis, the Greek unemployment rate rose from 21.5% in 2012 to 27.2% as of January 2013. The institutions which have extended financial and credit facilities to Greece, and in return have demanded "austerity" and financial discipline measures, are collectively known as the "TROIKA". These are the European Commission, the European Central Bank and the International Monetary Fund. Generally speaking, these requirements have imposed labor law reform. In May 3, 2013, the IMF noted that Greece has implemented "far-reaching labor market reforms". However, the IMF noted that the public-sector was still over-staffed due to labor restrictions on dismissals and criticized Greece for not having acted to liberalize "closed professions" to competition. Recently, instead of "May day" celebrations there were wide -spread protests in Greece by labor unions and left-wing groups in response to labor reforms required by the above-stated austerity measures. There are continuing, ongoing labor law changes occasioned by the government's attempts to impose the austerity labor law requirements including almost weekly or monthly Parliament, court, arbitration and mediation challenges and developments.

Specifically as of May 2013, Law 4093/2012 (Memorandum III) adjusted the application of Law 4046/2012 implementing the aforementioned wage, benefit and pension reductions. Law 4093/2012 titled: "Interim Implementation of Financial Strategy, 2013-2016 for Emergency Measures Amending the Application of Labor Law 4046/2012", continued the implementation of the labor reforms imposed and anticipated by the various prior "Memoranda". The new Law specifically/initially provides that for 2013: The new "National Collective Labor Agreements shall set forth and determine the minimum non-wage terms of employment, which shall then be effective for all employees within Greece. Base salaries, base daily wages, every type of salary and/or wage increase, and generally all wage terms provided by the National Collective Labor Agreements, shall be in effect only as to those employees who are members of the employment unions and/or federations who were contracting parties in the above stated National Collective Labor Agreement."

The law specifically states:

Until the expiration of the period of economic adjustment anticipated by the Memoranda annexed to Law 4046/2012 and the subsequent amendments thereof, determined that the legal minimum wage salary for employees and wage laborers as follows

(a) for employees aged 25 or over the minimum wage is set at 586.08 euros and for craftsmen over 25 the minimum day wages set at Euro 26.18

(b) For employees under 25 years of age the minimum salary shall be set at 510 95 Euro weekly and for hourly waige employees under 25 years of age the minimum daily waige was set at 22,83 Euros.

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Hahalis & Kounoupis, P.C. - Greek Law Group
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Hahalis & Kounoupis, P.C. - Greek Law Group