Inspectors from the Troika of Greece’s international lenders will return to Athens next week as the uneasy coalition governments they will demand a picked-up pace of layoffs and firings to reduce the public workforce by 25,000 this year.
Worried about a backlash from labor unions and more social unrest, the government is expected to argue that it can make the cuts through early retirements, attrition and letting go of disciplinary cases, the newspaper Kathimerini reported.
Firings are not allowed under the country’s constitution but the government has been ordered to proceed with them anyway in return for more bailout loans. The newspaper said that visiting inspectors expect specific commitments from the government regarding the number of civil servants – from the 25,000 who are to be put into a labor mobility scheme this year – who will actually be dismissed and want a breakdown by department.
Prime Minister Antonis Samaras, Finance Minister Yannis Stournaras and other ministry officials are in a series of meetings to prepare for the visit. Greece and its progress in implementing reforms is expected to be discussed at the next Eurozone meeting in Brussels on March 4, when the issue of Cyprus, and its need for a similar bailout, will also be discussed.
The Troika is also unhappy that the government, despite repeated promises, has done little to go after tax evaders who owe $70 billion. Worry is growing because tax revenues are far off expectations because pay cuts, tax hikes and slashed pensions have cut deeply into the disposable income of Greeks.
Troika experts delivered a report at the end of January that called for a major overhaul of the tax collection system, including the financial crimes squad (SDOE) which is reportedly in disarray and doing almost nothing to go after tax cheats in the wake of two of its former directors being accused of failing to check a list of 2,062 Greeks with $1.95 billion in secret Swiss bank accounts.
Greece’s lenders want these to come under the jurisdiction of the newly-appointed General Secretary for Revenues Haris Theoharis to prevent political meddling, but the government is resisting it, apparently anxious to prevent him from having autonomy and more power.
Unemployment is at a record 27 percent but that’s all in the private sector as successive governments have refused to lay off any public workes in the last three years of austerity. Samaras is reportedly keen to avoid it as well and the lay off plans are meeting fierce opposition from labor unions and public workers. So far only 2,000 have been put in a reserve capacity, to be paid 75 percent of their already-reduced pay and then let go in a year if new positions can’t be found for them.
The German news agency Der Speigel reported that Greek courts are quickly overturning the firings, which are against the Constitution that guarantees civil servants jobs for life even in the case of serious disciplinary infractions. Half of the 2,000 put in reserve have already returned to their old jobs and of 500 municipal workers affected, 300 have won their jobs back by court order or interim measures.
Samaras, the New Democracy Conservative leader, is also meeting resistance from his uneasy coalition partners, the PASOK Socialists and tiny Democratic Left, who don’t want the firings. New Democracy and PASOK have largely created today’s crisis by packing public payrolls with hundreds of thousands of needless workers for generations in return for votes.
With Troika inspectors coming to check the pace of reforms, including long-delayed privatizations of state enterprises and the sale or lease of state properties, the government is under pressure to meet fiscal targets to stave off immediate firings and more pay cuts, tax hikes and slashed pensions that Samaras promised wouldn’t be repeated.
Troika envoys are to meet on March 3-4 with Finance Minister Yiannis Stournaras and Administrative Reform Minister Antonis Manitakis to discuss the government’s position on the downsizing of the public sector.
The newspaper Kathimerini reported that the coalition is worried about having to sack public sector workers amid fears it could push unemployment to 30 percent or more. Democratic Left chief Fotis Kouvelis is strongly opposed to firing bureaucrats but he has often spoken out against government policies and relented.
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