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The taboo against the cuts in the public sector falls

16 October 2012 / 19:10:25  GRReporter
13850 reads

Anastasia Balezdrova

To start cuts in the public sector or not, this is the dilemma of the leaders of the tripartite coalition government of Greece. They met today to resolve the issue that is burning their hands like a hot potato.

The competent minister of administrative reform and constitutional law professor Antonis Manitakis, who is involved in the cabinet as a representative of the Democratic Left, is against dismissals. Meanwhile, the representatives of the supervisory Troika insist on obtaining information on the exact number of public workers who will be dismissed by the end of the year.

The public sector in Greece can easily be defined as a "sacred cow" and the "encroachment" on it is expected to cause reactions. At the same time, according to statistics, the private sector reports 1,000 new unemployed every day.

GRReporter asked the opinion of three analysts: an economic magazine journalist, a professor at the National School of Public Administration and a professor of strategic management and organizational studies in Cyprus and Britain's University of Warwick.

Journalist Costas Stoupas described the issue of cuts in the public sector as "a taboo topic for the Greek society because the Greek state has been built around the public sector almost from its inception. So, the perception that the government manages everything has gradually formed. This Greek phenomenon in 2012 has many similarities with the old Soviet model, which Balkan nations know very well and in which the major part of the economy is closely connected to the state. It happens in the following way: In Greece, there are private companies, but a large number of them do deals with the state. Such companies do not strive to be competitive and to monitor the prices of their products. Their only concern is to secure contracts with the state, which, in turn, is not interested in the value of products but only in bribes and commissions. The result is an economy that develops in the wrong way. Then, the global economic crisis ensued and now, we all are paying for this."

According to the journalist, the ruling coalition partners will not be able to avoid the cuts, because the next tranche of the aid is the only economic lifebelt for the Greek economy. "Everybody knows that if it is not paid, there will be tragic consequences not only for the government, which will not have funds to pay the salaries, but for the entire economy of the country. I think Greece is at a very critical crossroads and the government will be forced to implement the reforms as well as to cut the first public workers."

There is acquiescence relating to the public sector in Greek society and therefore, the reactions to possible cuts will be significant, Costas Stoupas says. "There are a very large number of people whose jobs depend on the public sector. If we add to the 650,000 people working in the narrow public sector the number of employees in state enterprises or companies that directly depend on the public sector, then we are talking about one million people. One example is the shipbuilders who “invaded” the Ministry of Defence 10 days ago. It is believed that they work in a private company, but its only customer is that particular ministry and its only revenue comes from it. In practice, workers in such companies that work for the needs of the state and depend on the state budget are a kind of public workers. Assuming they are one million in number and adding their families, we see that we are talking about half of Greece’s population. These people struggle with the reforms, but the dilemma we are facing now after decades of poor economic management are either redundancy or bankruptcy. And I think that's quite clear."

According to the teacher at the National School of Public Administration, Panagiotis Karkatsoulis, "The problem in the Greek public sector is twofold: There are services that either do not have a scope of activity or it is very limited and on the other hand, there are staff working in these or other services. This staff could and should have been revised at some point. I.e., two things have not yet been done: identifying the unnecessary public services and clarifying the number of people working there, what contracts they have signed and what they do.

The situation here is chaotic and the sole reason for this is, I think, that all these years, the political parties have established their power over the public sector and therefore, over public workers. Obviously, they did not want to effect this cleanup during all these years. In practice, this actually means that the state budget funds a number of services without knowing exactly what they are and why they receive funds. The same is true for employees appointed, who either stay there without any particular work, or move to political offices without it being clear for what they are paid. I think that in addition to the administrative there is huge political responsibility."

Panagiotis Karkatsoulis said that the current Greek government has started to make an inventory of such services and employees, but acknowledged that "It takes time and money to have a true picture of the things and to take fair decisions. So far, an inventory of services has been made and checks of employees, who have contracts based on private law and were not counted in the census of public workers, are currently underway."

According to him, all this is taking place very quickly because of the two years delay. An additional factor complicating the process is the lack of political consensus on this issue. "I think that's the reason for all the postponements and delays."

Tags: PoliticsPublic workersCutsReforms
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