The supervisory Troika returned to Athens to establish with great surprise that the commitments the Greek government took are still ageing only on paper. Yesterday, the representatives of the European Central Bank Klaus Masuch and the European Commission Matthias Morse met with the Minister of Finance Evangelos Venizelos and saw for themselves that neither the payroll table in the public sector nor the labour reserve have become a fact. Only the representative of the International Monetary Fund, Poul Thomsen, was not at the conversations. He is in Athens, but is ill. Most likely, he will join his colleagues today.
The unified payroll table has not yet entered the National Assembly. This is expected to happen next week. In it, the highest salary in the public sector will be € 2,200, and with the highest allowances, the highest salary will reach € 2,700. This means that the best-paid civil servants will lose up to € 1,500 a month from their current income. Civil servants salaries were reduced several times, but have not yet reached a level acceptable to the supervisory Troika.
The lowest salary in the public sector, which is currently € 711, will increase to € 780 to reach the average monthly salary in the private sector. According to the Minister of Finance, with the unified payroll table the income of 14.5 per cent of the civil servants will be drastically reduced, the income of 78 per cent of them will not change, and for 7.5 per cent there will be a small increase. The decrease in the income of the civil servants with the highest salaries will be introduced gradually.
Supervisory Troika representatives have not yet said their final "yes" for the payroll table and they quite honestly disagree with the labour reserve. They do not believe it could effectively reduce costs in the public sector and call for immediate cuts. The experts are very angry that instead of a list of 3,500 names to enter the labour reserve by the end of 2011, Evangelos Venizelos showed them a list containing 300 names. Lack of cuts equals in terms of money the amount that the government steals from the taxpayers with extra taxes. Even immediate dismissal without benefits is discussed to save budget costs. Troika has repeatedly stated that without drastic cuts in the Greek public sector the budget will not be balanced. Now, its representatives have put the cuts as a condition to continue their mission.
The Greek government is committed to send 30,000 government employees in the labour reserve by the end of 2011, while the number for 2012 is still being discussed. It will be included in the draft budget for next year. Now, the experts from Brussels, Frankfurt and Washington are unraveling it digit by digit as the government should adopt it that Sunday in order to enter the Parliament on Monday. Troika doubts the success of the extra taxes, and therefore calls for further cuts in the public sector.
Supervisors are angry because of the lack of privatization. The government of George Papandreou had promised to denationalize companies for € 1.3 billion in September. Not a penny from privatization has come in the treasure until today, the last day of September. The expansion of private interests in the state lottery OPAP and the international airport Eleftherios Venizelos is still wishful thinking. The outstanding obligations to the Troika include the law on the reduction of basic and supplementary pensions, and the pensions of disabled too. There is no progress with the laws on the reduction of social benefits, the updating of harmful occupations and the liberalization of the labour market.
To fill the constant demands for money in the public sector, Greece is increasingly resorting to issuing short maturity bonds. Kefaleo newspaper reveals that since 2008 the issue of such securities has increased 14 times! The interest rate, at which the State takes these short-term loans to meet its immediate needs, has increased. The publication quotes analysts who said that if Greece does not enter the markets soon to borrow money with two, three or five year maturity it will find itself at a dead-end. The increasing issuance of more bonds with maturity of three or six months at an ever-increasing interest rate is dangerous because the country’s indebtedness grows. Moreover, it brings uncertainty as to whether the next auction will bring Greece the required amount announced in advance and it will meet face to face with a credit event.