Labour Minister Yiannis Panayiotou has indicated the government intends to maintain and gradually expand the Cost of Living Adjustment (COLA) scheme whilst declining to reveal specific negotiation details ahead of intensified talks with social partners.
Speaking on state radio, Panayiotou expressed optimism that agreement could be reached if social partners demonstrate willingness to compromise, though he acknowledged the government has not fully disclosed its position on renewal terms and conditions.
The minister outlined three government objectives: strengthening wage adequacy, enhancing social cohesion, and expanding the middle class. He confirmed the COLA institution would be preserved as a fundamental component in efforts to strengthen wage adequacy and maintain middle-class strength.
Gradual expansion planned
Panayiotou said the COLA scheme would gradually cover more workers through collective agreement extensions, noting that private sector employees receiving COLA currently outnumber their public sector counterparts.
“The COLA contributes to restoring wage erosion from rising living costs,” Panayiotou said, citing government statistics showing low-income workers earning below €1,000 decreased by approximately 30% over the past two years, whilst those earning below €1,250 fell by 23%.
The minister confirmed his ministry had conducted preparatory work on the issue and held meetings with social partners. A moratorium on public statements was agreed to prevent new disputes between unions and employers as contacts intensify.
Government proposals ready
When asked whether the government had specific proposals for a permanent COLA solution, Panayiotou responded affirmatively but declined to elaborate further at this stage.
He emphasised that union organisation remains directly connected to the republic’s smooth functioning and noted the 30 June deadline was not a panacea, stressing the importance of reaching a permanent and functional agreement.
Panayiotou clarified that worker rights remain unaffected since COLA payments are made on 1 January, though this does not mean discussions would continue until then.
Upcoming meetings scheduled
The next joint meeting between the minister, employer organisations and unions is scheduled for Tuesday, 1 July. The minister is expected to hold separate meetings with both sides beforehand.
A pan-union conference has been scheduled for 7 July, where unions will decide their next steps.
Despite initial appearances that these statements might reassure union organisations given the government’s intention to maintain and expand the COLA scheme, the minister’s reluctance to fully reveal negotiation positions leaves key questions about potential changes to the allowance’s form and granting conditions unanswered.
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