8 MARCH 2007 EUROPEAN EMPLOYMENT review 398

Tey can also specify a wider

range of care, and be charged
individual supplements.
From 1 January 2009, all
private insurance funds must
ofer a new basis tarif, which
must be comparable with the
range of benefts ofered by
the public system and cost
no more than the maximum
contribution to a public fund.
Individuals on other more
expensive private plans
will be able to switch to this
during a six-month transition
period, a limitation imposed
afer intense lobbying by the
private insurers, who feared
a wave of cancellations. Tis
move is intended to increase
competition between private
insurers. Members over the age
of 55 will be allowed to switch
to the cheaper option, but must
remain with the same fund.
Funds will be obliged to accept
anyone who meets the statutory
income criteria, without
making a risk assessment.
Te reform with the
biggest impact in terms of
fnancing will also begin in
2009, with the establishment
of a national health fund
(Gesundheitsfonds). Tis
fund will receive all employer
and employee contributions
to the public system some
145 billion as well as
some revenue from central
government. At this point,
all statutory funds will have
the same contribution rate.
Local funds will then receive
a per capita sum for each
member, based on a risk
assessment of their average
needs efectively creating
a national single system of
fnancing based on need. If
this does not prove suf cient
to meet a funds expenses,
it will be entitled to levy an
additional 1% on members
taxable income. However,
should this happen, members
will be allowed to switch funds.
Where a fund operates more
economically than the average,
it will be able to return money
to its members.
Tere will also be a
rationalisation in the overall
management of the system,
with one national association
for statutory funds (in place
of the current seven).
Te key question posed by
critics of the reform is whether
contributions will fall on
average. Some have argued
that the reforms are not likely
to curb the expected rise in
costs in the next few years, with
a number of commentators
anticipating that contributions
to the new fund will be running
at over 15% of pay in 2009.
GREECE
One-fth of
Greeks live in
relative poverty
Recent months have seen a
political debate on income
distribution and efective
welfare policy as it becomes
increasingly likely that general
elections, due in spring 2008,
may be brought forward and
could take place any time afer
April 2007.
Te debate opened with the
conservative New Democracy
government publicising the
fndings of a national statistics
service (NSS) survey, based
on 2004 data, examining
unequal income distribution,
poverty and the resulting social
exclusion. It found that almost
one in fve Greek citizens, or
about 2 million people, live in
conditions of relative poverty.
In terms of the ratio of total
income received by the 20% of
the population with the highest
income to that received by the
20% of the population with the
lowest income, the top ffh
are six times as well of as the
lowest. Tis is one of the most
unequal income distributions
among the pre-2007
25 EU member states.
Te government has
announced plans to increase
social spending by 1% of gross
domestic product (GDP) in
the next four-year term, if it is
re-elected. On the other hand,
the main opposition party,
the socialist PASOK, has been
running a political campaign
under the slogan just society
or society with justice,
and has drafed an electoral
programme focusing on
income redistribution. Other
opposition parties have been
concentrating their campaigns
on inequality issues, as have
the trade union confederations
representing private sector
employees (GSEE) and civil
servants (ADEDY).
Te NSS study defned the
poverty threshold in 2004 as
5,649.78 a year for single
people and 11,864.54 for a
family with two dependent
children. Applying this
defnition, a total of 832,456
households or 2,088,701
people, representing 19.6% of
the population were found
to be living in relative poverty
in 2004. Women were found
to be slightly more vulnerable
to poverty than men (20.9%
compared with 18.3%), as were
older people: 27.9% of those
over the age of 65 were found
to be living in poverty.
Regarding the impact of
welfare spending in Greece in
2004 compared with the old
EU15 and excluding welfare
payments, the study found
that 23% of the population
in Greece lived below the
poverty line, compared with
an EU15 average of 26%.
Including welfare payments,
the percentage in Greece falls
to 20% and to 17% on average
in the EU15. Tese fndings
have sparked a debate about
the efectiveness of social
policy design and spending
on welfare policies. In Greece,
this amounts to 45 billion
a year, which is 26.3% of
GDP. Total social protection
expenditure as a percentage
of GDP reached the EU25
average in 2001 and, although
it has fallen slightly since
then, it remains close to that
average, at 26%, compared
with 27.3% in 2003.
Controversy over
ship crew plans
Te Greek-owned merchant
feet, which is the world
leader, accounting for 16.1%
of global shipping capacity,
is expanding fast, but there is
a shortage of of cers to crew
the ships. Tis shortage has
emerged as new-generation
vessels are being added to the
feet and it is causing serious
problems for shipowners, the
maritime shipping ministry
and the Panhellenic seafarers
federation (PNO).
One response to the situation
has been the ministrys promise
to expand the marine of cers
training college. Te ministry is
also proposing to permit more
fexibility in the composition
of crews sailing under the
Greek fag, in an attempt to
increase the share of the Greek
merchant feet fying under
national colours; according to
Lloyds shipping register, only
32% of Greek-managed ships
are on the Greek register. Of
the remaining ships, 14% sail
under the fag of Panama; 13%
are registered in Malta; 10% in
Cyprus and Liberia; and 7%
in the Bahamas. Greek-owned
ships account for 49.7% of the
EUs deadweight tonnage; 50%
of Chinas dry bulk cargo and
60% of its liquid cargo.
Te ministrys plans to
reduce the compulsory
proportion of Greek seafarers
on Greek-registered ships
have been sharply criticised
by the PNO trade union
federation, which is concerned
that, although there may be a
shortage of high-level of cers,
many of its lower-level crew
members remain unemployed.
Te union has considered
industrial action, but decided
against a strike at this stage.
For its part, the EEE Hellenic
shipowners association
has welcomed government
measures aimed at improving
the competitiveness of the
national register, commenting
that, as a result, the number
GERMANY GREECE NEWS
EIRR398_News.indd Sec2:7 9/3/07 14:02:30
398 EUROPEAN EMPLOYMENT review MARCH 2007 9
of Greek-registered ships
may rise. It has also called
on the government to make
more efort to inform young
Greeks of the opportunities as
high-level seafarers on board
and in shipping enterprises.
Tis, it hopes, may help resolve
structural imbalances in the
sectors labour market.
HUNGARY
Central pay
recommendations
agreed for 2007
On 30 January, representatives
of trade unions, employers
organisations and the
government on the tripartite
National Interest Reconciliation
Council (OT) agreed a
recommendation for private
sector pay increases in 2007.
Te deal suggests that nominal
wage rises should be between
5.5% and 8%. With a predicted
infation rate of 6.2% in 2007,
real wage increases are likely to
be low or negative, although the
centrally recommended pay rise
fgure tends to be outstripped by
actual increases for example,
while the recommendation
for 2006 was 4%5%, average
private sector wage increases
stood at around 8%.
Bargaining over the
recommendation in the OT
lasted some three months,
which is considerably longer
than usual. Unions had initially
demanded 8%11%, later
dropping this to 6%9%, while
employers organisations ofered
4%6%, later increasing the
upper end of the range to 8%.
Following the deal, both unions
and employers stated that the
compromise recommendation
expressed their willingness
to take responsibility for the
national economic situation, in
the context of the governments
convergence programme for
joining the eurozone, which
foresees a cut in real wages in
2007. Te OT debated and
accepted the convergence
programme in autumn 2006.
In the public sector, a pay
deal for 2007 was reached on
19 February, following union
threats to strike afer the
government initially proposed
a wage freeze, and then ofered
a 5.5% rise. Te agreed increase
will be 6.65%, while the
government has also promised a
bonus in 2008 if the euro-entry
programme is on track.
Social dialogue
laws questioned
In December 2006, parliament
adopted by an overwhelming
majority laws on the tripartite
National Interest Reconciliation
Council (OT) and on bipartite
sectoral social dialogue
commissions. However,
the president of Hungary,
Lszl Slyom, has refused to
sign these laws and referred
them to the Constitutional
Court for examination of
their constitutionality.
Te OT has functioned
since 1988 as a national-level
institution where trade unions,
employers organisations and
the government debate matters
such as labour legislation,
pay, social security and the
labour market, ofen reaching
consensus (for example, during
the economic and labour
market restructuring of the
early 1990s). Te sectoral
social dialogue commissions,
bringing together unions
and employers organisations
at individual industry level,
were set up in 2004 in an
attempt to address the
general absence of collective
bargaining at this level. Both
the OT and the sectoral
commissions were established
by governmental decrees rather
than parliamentary legislation
and, in the 1990s, Slyom,
who was then president of
the Constitutional Court,
questioned the legitimacy of
the OT exercising public
authority without democratic
authorisation. According
to Slyom, the rights of this
tripartite body to decide on
minimum wage rates and to
manage the Employment Fund
(which fnances labour market
policy measures) represent
public authority functions,
while its members are not
elected but appointed on the
basis of a tripartite agreement.
According to the president, this
is not suf cient to confer the
democratic legitimacy required
to exercise public authority.
Afer the creation of the
sectoral commissions, the
government bowed to pressure
from the Constitutional Court
and sought to give them
and the OT the backing
of legislation adopted by
parliament. Te two resulting
laws were approved almost
unanimously in December
(with 338 votes in favour
and only two against) and
received the support of both
government and opposition
parties. However, they are
now on hold pending the
Constitutional Courts
decision. Unions and
employers organisations
have stated that they will not
accept any outcome that would
diminish their rights and
argue that the laws adopted
by parliament have laid down
criteria for the social partners
representation that should
provide democratic legitimacy
for the operation of the OT
and the sectoral bodies.
IRELAND
Ryanair offer
to pilots
Ryanair has informed its
Dublin-based pilots that it is
open, ready and willing to
discuss and negotiate the 2007
pay round with them directly,
whether they are a member of
any union or not. Te low-cost
airline is set to ofer these pilots
the same pay rise as its pilots
at other bases across Europe
and states that it has started
negotiations with its employee
representative councils on the
April 2007 pay review.
Tis move follows a
long-running dispute between
the Dublin pilots and the
company regarding the
conditions surrounding the
introduction of a feet of new
planes. Te dispute started
in 2004, when, among other
things, pilots were told that
they would have to repay the
15,000 cost of training for
the new planes if the airline
was forced to deal with a
trade union within fve years
(EER 379 p.9).
A case relating to the
dispute was brought in the
Labour Court (LC) by the
Impact trade union on behalf
of pilots afer an amendment
to the Industrial Relations
Act in 2004 gave the LC
jurisdiction to hear complaints
from workers at companies
where no union recognition
or collective bargaining was
in place (EER 374 p.10). Te
LC decided to investigate
the case, as it found that no
bargaining existed for pilots
at the company (which does
not recognise unions but has
employee representative
councils). Ryanair challenged
the LCs right to investigate.
Te High Court ruled in
October 2005 that there was
a trade dispute at Ryanair and
that the LC had jurisdiction
to investigate the dispute
(EER 382 p.9).
Ryanair appealed
against this ruling to the
Supreme Court, which, in
February 2007, ruled that the
LCs procedures for hearing
the preliminary case were
fawed. Some commentators
interpret the Supreme Courts
ruling as contradicting the
LCs fnding that Ryanairs
employee representative
councils do not constitute
a proper bargaining unit.
However, the Supreme Court
has referred the case back to
the LC for reconsideration
and Impact claims that the
ruling upholds the power
of the Labour Court to make
fndings in such cases where
NEWS GREECE HUNGARY IRELAND
EIRR398_News.indd Sec2:8 9/3/07 14:02:41