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New salary reduction comes with the new year in Greece. Employers' organizations and trade unions sit at the negotiations table again to find a compromise on the reform of legal labour relations two weeks before the supervisory Troika return to Athens. Proposals of the employers are for the collective agreements to be suspended for at least three years as well as the increases according to them. Some of the employers even insist on reducing the statutory minimum wage by 20%. Currently it is 751 euro and young people under 25 years with no work experience receive 600 euro or 80% of the minimum wage.

At present Greek unions firmly refuse to accept the new proposals for reduction of the remuneration. "Collective agreements are inviolable. The trade union movement would not agree to the breach of even an iota of them," said the President of the Union of those employed in the private sector, Yannos Panagopoulos. The negative economic growth, deepening recession and high taxes do not leave a great choice for employers. Over 120 thousand small and medium enterprises have ceased operations since the beginning of the crisis and the number of unemployed in Greece is approaching one million.

The position of the supervisory Troika is that considering the state's requirements as regards revenues, reduced turnover and profit margins, the reduction in wage costs is a necessary step to keep business alive. Moreover, this is currently the fastest way to improve somewhat the competitiveness of Greek products on the foreign markets. At the same time monthly payments, mainly in the public sector must comply with the productivity of the country.

Representatives of the International Monetary Fund, European Central Bank and European Commission will return to the Greek capital in mid-January. Then the negotiations will also start for signing the second contract for financial assistance, which will provide around 80 billion euro only until the spring of 2012. Among other reforms, the supervisors expect to see progress in the liberalization of the labour market. Another option that is being considered by the public organizations is the reduction of the average salary by eliminating the benefits and allowances. The first benefit, established in the collective agreements to be sacrificed will be the one for experience. Most affected by its removal will be the people who have been working for many years.

The Ministry of Employment and Social Security makes it possible to reduce wage costs without reducing the net remuneration of workers through the introduction of a labour card. It is a magnetic device, which detects the start and end time of work of employees and the Ministry receives accurate information on the number of employees in the company, their working hours and the exact amount which is expected to enter into the insurance funds of the specific companies. If entrepreneurs accept the magnetic card system, the ministry grants them a 10% discount on the payment of social security contributions for their employees. The programme with magnetic labour cards is expected to come into force in March this year and by 2014 the discount will reach 25%.

Expect further details.