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Victoria Mindova

Four new employment promotion programs are starting in April this year. The total amount of the government subsidy is 816 million euro which will be provided for covering health and social security when employing new staff members in the private sector. According to information of the Employment Bureau the programs are oriented towards opening of new job positions and there is a possibility that the programs will cover the employment insurances of 119 thousand unemployed people.

The subsidy will be paid by bank transfers from the Employment Bureau to the social security offices for the person employed on behalf of the respective employer without actually wiring any money in the account of the company. The goal of this new system is to avoid probable abuse of the funds provided. The Ministry of employment and social security has decided that the amount of the subsidy payments will be calculated on the basis of the minimum wage in the country which is currently about 740 euro. If the people hired because of this program are being paid a salary higher than the minimum one, the employer will only pay the difference between the amount of the subsidy and the full social security installment.

The first employment promotion program includes about 40 thousand unemployed people in Greece from all ages and has a budget of 500 million euro. The Ministry of employment is planning for this program to be available when hiring people for four years and goes in two main directions. The first one is for hiring unemployed people from all ages and social groups for whom the Employment Bureau will cover 100% of the social securities for the first year of work. During the second the Bureau will cover 75%, during the third year 50% and during the fourth year 25% of the social security payments.

The second direction of this program is only related to the special social groups of unemployed specified by the Ministry of employment. We are talking about young people under 30 years old, unemployed, who are close to the age of retirement or need not more than five years length of service in order to retire as well as 45 years old women without any length of service or unemployed for a long time. In the special groups of unemployed are also included the parents of many children, all women over 50 years old, parents, who are raising their kids alone. When hiring an unemployed person from the special social groups the program provides a subsidy for covering of 100% of the social security payments on the part of the employer for the first two years. For the third and fourth year the program will cover 50% of the payments of health and social securities of the employee which have to be paid.

The second program of the Employment Bureau has a term of two years and a budget of 170 million euro, provided by the National Strategic Reference Framework (ESPA). This program can cover up to 25 thousand people and with its help the employer will be relieved of 80% of the social security payments to be paid for the newly hired employees in the first year and 60% for the second year. When hiring an unemployed person from the special social groups these amounts will be 80% for both of the years.

For the first two programs can apply small and medium companies from the private business with staff less than 50 people. It is mandatory that before applying for the respective program the employer has not made any cuts in staff and after the term of the subsidy ends they should keep the people employed for at least one more year. The Ministry of employment and social security excludes from the security guard companies, centers for amusement at night (bars, clubs, bouzouki etc.), the seasonal and part time employment companies from the list of the activities which are suitable to apply for subsidy from the new programs.

The third program is related to the increase of the employment of women in Greece which is considerably lower than in the rest of the European countries. It includes about four thousand unemployed women between the ages of 22 to 64 years old and has a free budget of 96 million euro also provided by the funds of ESPA. This project allows women to open up a private business of their own and pays the subsidy in few stages for a period of 36 months after opening of the activity. The program provides up to 24 thousand euro non recourse capital.  

The last program presented by the Employment Bureau is related to the seasonal work and most of all the hospitality management business and affects about 50 thousand unemployed. The companies/hotels suitable to apply for subsidy under this program have to hire the same amount of employees they had in season 2009 and have to add two additional months of work in the labor contract other than the period June - September. The Bureau will cover 100% of the social security payments for the additional two months of employment.

The new programs give the opportunity for the small and medium companies to decrease their operational costs in the period of an economic crisis and at the same time an additional stimulus is created for the increase of the employment in the country.