The labor reform promoted by Prime Minister Kyriakos Mitsotakis laid the foundations for the reactivation of the economy and the recovery of the labor market. The Minister deepened the deregulation of labor legislation in order to encourage formal hiring and reduce unemployment.
The first results of the new legislation are overwhelming. The unemployment rate fell to 11.6% of the active population in October 2022, and it is the first time that the indicator has scored below 12% since April 2010.
Only since the launch of the reforms has unemployment accumulated a drop of 4 percentage points since June of last year. The number of employed persons reached 4,152,000 in October, and once again constitutes the most important record since the second quarter of 2010.
Unemployment is close to reaching the lowest levels recorded since before the Great Recession of 2008. But unlike then, this time the more flexible labor legislation allows the same rate of GDP growth to now be capable of creating more jobs of work than before.
Likewise, Greece ceased to hold the highest unemployment rate in the European Union since June 2022, since from that moment the place is occupied by Spain. It should be noted that the Government of Pedro Sánchez implemented a labor reform diametrically opposed to the Greek one, which toughened the regulatory pressure on contracts in the country.
THE MAIN POINTS OF THE LABOR REFORM
As of June of last year, the new labor legislation allowed the introduction of more flexible contracts focused on hiring young people, a new special legal framework for teleworking was designed, and social charges were lowered at a general level.
Labor taxes on payroll paid by companies were reduced from 24.81% to 22.54%, while the tax on gross land received by workers was lowered from 15.75% to 14.12%.
The new labor regime actively promotes the decentralization of labor negotiations. Workers were empowered to freely negotiate with their employees in the case of extended hours, while the legal limit increased from 8 to 10 hours per day but not the limit of 40 hours per week.
With information from La Derecha Diario