Table 1 Advice on labor market issues in IMF-supported programs in Europe

Greece

Unemployment benefit coverage and training programs expanded

Change in trial period and regime for collective dismissals; change of part-time and overtime regime; shorter notice period and revised notice and severance payment regimes

Sharp cut (from high levels); additional cut in youth minimum wage; maturity allowances in the minimum wage frozen; minimum wage made statutory (set by government, with consultation of social partners)

Suspension of the extension of sectoral collective bargaining agreements; reform of firm-level regime (suspension of favorability clause; broadening the scope for conclusion of agreements with work councils and workers’ representatives). Arbitration system switched to voluntary recourse; length of collective contracts limited

Automatic salary increases frozen; public firms can align contract terms to those in private sector

Iceland

Spending on unemployment increases, mostly through cash benefits. Job retraining, subsidized hiring and study programs

Ireland

Strengthened labor activation and training for job seekers, particularly long-term unemployed. Targeted fiscal policy and investment projects to foster job creation

Revised regime for sectoral wage agreements (Registered Employment Agreements and Employment Regulation Orders)

Substantial wage (including pay rate and allowances) and personnel cuts; further reductions to public sector wage bill through improved rostering and longer working hours; increased redeployment possibilities within the public sector

Latvia

Emergency public works program to help unemployed

Substantial wage (and price) cuts

Portugal

UI benefit reduced (from very high levels). Steps to improve education and training for long-term and youth unemployed

Reduction in protection (from high levels), including cut in severance pay. Reform of overtime regime

Frozen (level not high but increases during 2007-10 had outpaced productivity)

Change in regime for firm-level agreements (broadening the scope for conclusion of agreements with work councils and workers’ representatives); change in regime for extension of collective bargaining agreements (ensuring significant representation before extension of agreements to whole sector)

Substantial wage cuts (including elimination of 14^th month salary)

Romania

Reform of legislation governing working time regime and fixed-term work arrangements

Minimum wage raised (from initially low levels)

Change in collective bargaining regime aimed at promoting decentralization of wage setting

Temporary cuts in public wages (reversing increases during 2006-08) and scaling back employment; new public wage law