tagged: civil servants, EU, evangelos venizelos, exceptions to the rule, Greece, Greek Finance Minister, IMF ECB, mergers, new public payroll, privatizations, state-run enterprises, Troika

Troika Shows Greece a Bunch of Yellow Cards over Delays

Posted by keeptalkinggreece in Economy

Oh Oh Oh! I see a storm gathering over our Greek heads again. The Athens Stock Exchange is falling anew,  the Finance Minister warns us of ‘tough next two months’ and the Troika shows Greece the one yellow card after the other.  I could summarize the whole issue in a few words: Athens makes laws but shows incredible talent is delaying their implementation. Further these laws have many attractive back doors so that a portion of chosen people (read: civil servants) keep sitting on their benefits. This post could end here…

But it doesn’t. Then I assume you want to know some more details of what I am talking about.

Several MPs posed questions of several economic issues to Finance Minister Evangelos Venizelos during an interparty parlamentary committee. From what I read in the Greek news Venizelos’ answers were neither explanatory nor sufficient. And it seems that Venizelos is hoping for a renegotiation with the Troika due to the scary recession estimated to reach 4.5%. Proving wrong the calculations of both Greece and its international lender-friends.

During the committee session, Venizelos  stressed that ”the next two months will be very tough, because of the continuing recession, which requires renegotiation of objectives and deadlines between the government and the troika”.

At the same time, the Troika-guys from EU, the IMG and the ECB who arrived in Athens on Monday to check the fiscal progress seem rather disappointed by the Greek performance in the application of the Loan Agreement and the Austerity plan.

There is a huge problem with the privatization targets as the downward trend in the Athens Stock Exchange sharply decreases the nominal value of the state-run enterprises to be privatized. Greek MinFin maybe is concerned about it but after all he argues that “there are thoughts and plans” to address the problem.  He reportedly cited speeding up the privatization of companies that are not listed in the ASE.

Troika on its side is rather dissatisfied to see that tha planned privatizations, mergers and shut-downs of  state-run enterprises bringing losses ir having no real object.  This measure was considered a key term in the Memorandum of Understanding signed between Greece and its lenders in spring 2011, but only recently a procedure has been launched for the merger of about 60 organizations.

For the Greek government there is a major dilemma: What will happen with the employees if the state-run enterprises shut down? There is the plan of so-called “work reserve” where civil servants of merged or shut0downed enterprises will  stay at home and receive 60% of their salary for 12 months. If there is no work place for them after the one year, they will be slowly led outside the public administration in the state of public …unemployment.

Troika showed another yellow card to Greece concerning the issue of  the exception of tax officers from the new public payroll. While the rest of the civil servants will face salary decreases due to the new public payroll, the tax officers will have increases in the next 7 years to balance the losses from cutting benefits and allowances. Needless to say that this preference treatment has triggered a war between the several civil servants unions.

It looks as if the Greek government needs to lure tax officers as 34 of the country’s biggest tax offices proved not to have performed as requested during the last June. These tax offices get 70% of the total state revenues through taxes. That was stated by the General Secretariat of the Greek Finance Ministry.

However, traditionally Greek civil servants build the voters’ base for the two big parties governing Greece in the last three decades. Will the Troika overturn our beloved traditions?