Prime Minister Kyriakos Mitsotakis participated in an event organized in Brussels by the think tank “Friends of Europe” on the topic “Greece’s National Social Agreement: A European Model for Social Dialogue.” During the event, the Minister of Labor and Social Security, Niki Kerameos, held discussions with the Executive Vice-President of the European Commission, Roxana Mînzatu, responsible for Social Rights and Skills, Quality Jobs and Preparedness, and with the President of the European Economic and Social Committee, Séamus Boland, regarding Greece’s successes in the labor market.
The Prime Minister’s speech follows:
Well, I guess I’ll just drop my notes because this was a very inspiring conversation. Thank you so much, Mr. Kanani, for an excellent moderation. Thanks to the Friends of Europe for hosting us, and thank you all for attending. I know it’s a very busy day in Brussels. I’m happy that we brought you some Athenian heat. I don’t know how long it will last, but make sure you enjoy it.
I’m really happy to be attending this event, Madam Vice President. I remember the very interesting meeting we had in Athens when we celebrated the signing of this national collective labor agreement between all the social partners and the government. And it was a milestone event for a country that, as you pointed out, did not really have a strong tradition of collective bargaining.
And I think it came at a very, very interesting time because if you look at the overall development of the Greek labor market, we have made, as Niki said, a lot of progress over the past years. When we first came into power in 2019, we made fighting unemployment our number one priority. And it was only natural because at the time we had an unemployment in excess of 18%. Youth unemployment was around 40%. 500,000 Greeks, many of whom actually chose Brussels, had left the country in search of employment opportunities abroad. And addressing this urgent concern was our top political priority.
Seven years later, I think we have made remarkable progress. Unemployment is now around 8%. We have created 560,000 jobs. We have been able to reverse the ‘brain drain’ tidal wave, so we bring back more people than actually leave the country. The Ministry of Labor is organizing amazing events across Europe where companies and young Greeks join forces and explore the employment opportunities in our country.
And of course, as unemployment has been coming down at a very fast pace, wages have also increased. We made our second term, when we won our reelection in 2023, very much about increasing wages.
And we set very clear targets: the statutory minimum wage was €650 when we came into power in 2019. We have made a commitment that it will reach €950 by 2027. We’re at €920 now, so I think there’s a pretty good chance that this target will be met and even possibly exceeded.
We set a very clear goal in terms of the mean full-time wage. We said it should reach €1,500 by 2027. We are already there in 2026. We wanted more full-time employment and less part-time employment. We’re very much moving in that trend.
We wanted better protection of employee rights, and one of our major reforms has been the introduction of a digital labor card, which digitally and in real time tracks employment time, including overtime. And this addressed a major concern by workers that they were actually working overtime and they were not getting paid for the work they offered.
So when we talk about fair pay, I guess the first question is to make sure that you get paid for the actual hours that you work. So we’ve made improvements along all those fronts. But as Niki said, there was still a big gap, and that was the number of employees covered by collective labor agreements.
And indeed, when Niki first came to present this idea, I was slightly cautious because in the past we had seen trade unions quite frequently being weaponized by political parties, very good at demonstrating, not very good at attracting very large crowds recently. Maybe this points also to the changing role of trade unions.
But although the social partners managed to sit in a room, especially the Federation of Employees and the Federation of Employers, and actually reach what I consider to be a, you know, a true milestone agreement, which is a framework agreement that was ratified by our parliament, but essentially signed by the social partners and the government as a guarantor of what essentially was agreed, which was later enshrined into law.
And it is very interesting how much progress we have seen since because we’ve seen a number of sectoral agreements being signed, and these sectoral agreements always, always deliver better working conditions and, of course, better wages for the employees that are covered.
And at the end of the day, we need to be aware that the first problem that all governments are faced with today is affordability. And when we talk about affordability, the answer should be more disposable income. What does more disposable income mean? It means higher nominal wages and less taxes. That’s the way you build and you strengthen disposable income.
So these sectoral agreements have been able to deliver better wages and better working conditions, and I do expect that this trend will continue. And I think we’ve reached a level of maturity where we can use these best practices and no longer point to them as exceptions, but try to make them the rule.
For example, I was in Rhodes a few days ago and there the local organization of hotel owners and the local representatives of hotel employees had actually signed an agreement that delivered significantly better compensation compared to the national agreement related to people working in the hospitality sector. And I think this is also becoming important at a time when employers realize that attracting talent is no longer a very easy job. It’s easy to attract talent when unemployment is at 18%. You find lots of employees. But when unemployment is around 8%, you need to offer something better. And this is not just a better wage, but better benefits, better working conditions.
And I’m happy that Greek employers are beginning to understand that their well-being is very much tied to the well-being of their employees. And I guess this is the foundation of our social contract, and this is something that is really beginning to happen in Greece, especially in sectors such as hospitality. So my last point, and I’m particularly proud of that, is that this agreement was actually signed and ratified by a center-right government. This is not necessarily something you would expect.
Usually it’s the left that is always talking about employee rights, but it is a center-right government that was able to deliver an agreement that essentially benefits both employers but primarily benefits employees. And at a time when, as you pointed out, young people across Europe feel threatened by major upheavals in the job market, at a time when AI is going to be a massive, massive challenge for social cohesion and will lead inevitably to significant labor market restructuring, the fact that a government, but also the representatives of workers actually care about workers and deliver concrete results, I think is particularly important.
We speak a lot about trust and we all know that trust is a very elusive concept in its own right, but the only way I know to build trust is to make sure that you stick to your commitments, and to deliver results. It may sound very simplistic, but there are not many governments in Europe that are currently doing that.
I’m proud that as we enter the last year of our term, we have delivered on our commitments when it came to wages. We have made significant changes in the labor market. We have put the protection of labor rights at the center of our labor policies. And we’ve been able to bring together around the same table employees and employers to sign mutually beneficial agreements.
And again, it is important to note that these agreements need to also take into consideration issues such as productivity. For example, our new law determining the minimum wage, which will come into enforcement in 2028, makes this point very, very clearly because we don’t want to be put in a position where we offer maybe attractive nominal wage increases, but these are not truly supported by productivity.
The next challenge, I think, is also going to be how we use AI to enhance the productivity of our workforce and making sure that we go through a massive, I think, reskilling and upskilling program to introduce our labor force, both in the public sector and in the private sector, to the possibilities that AI offers in order to make our employees much more productive.
And as I read somewhere, you could be replaced by an AI chatbot, but it’s much more likely that you will be replaced by a human who knows how to use AI. So knowing how to use this technology is absolutely critical, and I think it should be at the forefront, Madam Vice President, of our priorities.
So, let me thank you again for inviting me. Let me congratulate the Commission on taking important initiatives and highlighting this, I think, important achievement as a European achievement. It feels good for us, you know, in Greece. 10 years ago, not many people said good things about Greece in this city. But due to the perseverance of the Greek people, I think we’ve been able to deliver significant reforms.
Our economy now is an economy that is producing very healthy primary surpluses. Our debt is being reduced at the fastest pace of any country in the history of the OECD. And at the same time, we’re able to use our primary surpluses in a targeted manner to offer tax cuts and income support to those in greater need to help them against this wave of inflation and price increases, which has hit all economies essentially since COVID.
So I do hope that our story could be an inspiration for other countries, and if you ever need advice on how to handle, you know, delicate characters when you lock them up in the same room, you can just ask Niki.
Thank you very much.
