“Europe is turning into an entrepreneur’s paradise,” says Apostolos Kapsalis from the Labor Research Institute in Athens, which is part of the Greek trade unions confederation GSEE. “And Greece is the lab rat in this European reform experiment. In Greece they are testing how far they can go.”
The reforms, particularly in southern Europe, are far-reaching. In Greece the minimum wage has been lowered from €750 to €590, while unemployment benefits have been cut from €460 to €320 per month. Collective bargaining through trade unions has been replaced in many sectors by wage agreements between individual companies and their employees.
In Spain the retirement age has been raised from 65 to 67 and companies can now change working hours and wages without consulting the trade unions if a company is facing economic difficulties. Italy's new government under Prime Minister Mario Monti has also raised the retirement age and workers now have to pay contributions for a minimum of 42 years, rather than 40, to receive a full pension. Companies are legally entitled to undercut wage agreements reached by collective bargaining, Italy’s strict dismissal protection is going to be liberalized.
The governments in these countries are risking considerable social upheaval – most recently, hundreds of thousands of Spaniards marched in protest last week – by dismantling some workers' protections, and some observers question their motives.