The Bank of Greece predicts a ‘significant’ increase in fees for this year

By Dimitris Katsaganis

The increase of employment and wages is predicted for this year by the Governor of the Bank of Greece, Mr. Giannis Stournaras, in his annual report for 2021.

In detail, Mr. Stournaras’ report by field (employment, labor costs) states the following:

Employment

“Prolonged stay of young people in unemployment has long-term negative effects on their employment prospects and earnings and increases the chances of leaving the domestic market and looking for work abroad. The employment and participation of young people in the labor market presupposes the strengthening of this demand in sectors and jobs with high added value, attracting foreign direct investment and strengthening the extroversion of the Greek economy.Finally, the development of teleworking is expected to help maintain jobs in Greek companies by reducing operating costs, competitive advantages through easy access to a skilled workforce, especially young people In the context of boosting employment and income support, the following measures will be implemented in 2022:

(a) extension until March 2022 of the COOPERATION program;

(b) extension of suspensions of employment in the catering, sporting and cultural sectors (January 2022); and

(c) extension of the reduction of insurance contributions by 3 percentage points. In addition, following the 2% increase in the minimum wage from 1 January 2022 (from 650 euros to 663 euros per month), an additional increase is imminent from 1 May 2022, which will improve low-income income and boost disposable income. and private consumption. In terms of active employment policies, subsidized new jobs will increase from 100,000 to 150,000.

In addition, to address the unemployment of young people up to 29 years without work experience, assistance will be provided up to 1,200 euros for a period of 6 months during their first employment in full-time positions. Finally, the redesign of training programs to be more closely linked to the needs of the labor market, the interconnection of education with the needs of the real economy and the enhancement of workers’ digital skills are emerging issues in the changing labor market environment.

The expected positive growth rates of the economy, in combination with the new measures, are expected to have a positive impact on the labor market.

However, the development of the war in Ukraine, the increase of uncertainty and the extent of inflationary pressures are expected to slow down economic activity. Accelerating the absorption of funds from the National Recovery and Sustainability Plan “Greece 2.0” will help create new highly skilled jobs and maintain positive employment growth rates. ) 9 with a view to increasing employment, reducing unemployment, protecting workers and supporting the social security system, as well as further strengthening support measures for vulnerable groups such as the long-term unemployed, young people and women , for inclusive development ”.

Labor costs

“In the current year 2022, total wage earnings are expected to increase significantly, reflecting a significant increase in employment and a modest increase in wages per employee. As economic activity will continue to grow (but – as expected – slower than expected) in 2021, when the high rate also reflected the base effect), productivity is expected to show a slight increase, which will contribute to a slight decline in labor costs per unit of product.It is noted that the minimum wage increased by 2% from 1.1. 2022, while the legislative procedure for the determination and granting of a second increase has been launched since May, as announced by the government “.