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Greece: Labour market shows faint signs of recovery

05 April 2013

The Greek economy is showing small signs of recovery after five years of recession, even though it is still “in a critical situation”, according to Antonis Samaras, the prime minister reported in the Financial Times.

Mr Samaras cited figures from the labour ministry indicating that new hirings in the private sector in March outpaced lay-offs for the first time since 2009 with a net gain of 8,000 jobs.

Last month’s rise in net employment to a large extent reflects improved flexibility in Greece’s labour market, with individual contracts replacing collective agreements at company level, according to Michael Massourakis, chief economist at Alpha Bank in Athens.

“The labour market reforms are working . . . Employers are hiring and firing more easily than previously,” Mr Massourakis said. “We can expect a further pick-up this month when seasonal hirings for the tourism industry take place.”

Thousands more jobs would be created by the expected relaunch of infrastructure projects stalled for more than three years by disputes with contractors over the terms of public-private partnerships agreed before Greece plunged into recession.

Kostis Hatzidakis, the development minister, has announced that a slimmed-down highway programme, in which the government’s contribution would be covered by EU structural funds, would resume this month.

The news came at the same time the Greek parliament passed the draft bill for growth and investments, which include a number of “emergency” labour arrangements.

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