The agreements, signed on Thursday by Finance Minister Makis Keravnos with the unions of the public and broader public sectors, PASYDY, SEK, and PEO, provide for a 1.5% increase in base salaries, effective from October 1, 2024. This marks the first salary increase in 15 years.

The minimum increase stipulated by the agreement, which covers the period from January 1, 2022, to December 31, 2024, amounts to €27.61 per month.

The last general salary increase for public and broader public sector employees was on January 1, 2009.

Following the signing ceremony with the unions of the broader public sector, a separate signing ceremony was held with the public sector union, PASYDY, within the framework of the Mixed Personnel Committee Agreement.

More specifically, the framework agreement signed with the unions SEK and PEO "authorizes the Boards of Directors of broader public sector organizations and the Councils of Local Authorities to proceed with direct negotiations with the respective trade unions to agree and renew their collective agreements within the framework of the Industrial Relations Code."

The general salary increases for employees and pensioners for the years 2022 and 2023 will be zero, while from October 1, 2024, a general increase of 1.5% on the base salaries as of January 1, 2024, will be granted, with a minimum annual increase of €331.28 (€27.61 per month).

This agreement covers permanent employees, fixed-term and indefinite-term employees, as well as hourly-paid labor and technical personnel.

Regarding the minimum amounts of general increases, the agreement clarifies that each percentage point (1%) of general increase means a minimum annual increase of €220.85 (€128.40 monthly), to which the cost-of-living allowance of 11.17% as of January 1, 2024, is added.

The agreement also stipulates that no requests for general increases will be submitted for a period of 12 months from the expiration date of the current agreement.

Additionally, the agreement states that for the remaining requests submitted by both the trade unions and the organizations, free direct negotiations will be conducted between the Boards of Directors of the organizations and the trade unions to reach an agreement in each organization separately, with neutral cost. In case of a dispute, the Industrial Relations Code will be followed.

Meanwhile, the Federation of Employers and Industrialists (OEB) has highlighted the need to rationalize the method of increasing the state payroll, in light of the recent agreement on salary increases between public sector unions and the Ministry of Finance.

In a statement, OEB stressed the importance of "developing a new organizational structure leveraging technology through digital reform, aiming to reduce the number of employees and significantly boost the productivity of the state mechanism in the medium term."

Until then, according to OEB, "the annual wage increase rate cannot exceed the GDP growth rate."

Given the unprecedented challenges and uncertainties in the current international context, OEB stated, "restraint and rationalization of practices that increase fixed and inflexible expenses are imperative."

OEB noted that "the autonomy of collective bargaining in both the private and public sectors is fully recognized and respected." However, it pointed out that "in the public sector, besides the additional increases agreed upon from time to time, such as the one recently announced, annual increases are granted in the form of increments and the Cost of Living Allowance".

"The rate of increase in the state payroll has been high in recent years, creating conditions for a return to the unsustainable levels of the pre-2011-2014 crisis period," OEB added.

Furthermore, the Federation cited a recent report by the International Monetary Fund (IMF), urging the government to find ways to contain labor costs and link wage increases to productivity incentives.

Lastly, OEB stated that it does not discuss reducing any employee's salary. "However, the IMF's recommendations on increments and Cost of Living Allowance require very careful consideration by the government's economic team."