According to The Economist, dated 14 January 2012, of 470,000 jobs eliminated in Greece since 2008, “not one has been from the public sector.” Reformwatch.gr seeks to chronicle and to track the pace of reform in Greece necessary for the country to survive as a developed nation in a community of developed nations. If the above figure is true, or even remotely so, there has clearly been no reform.
Actually the quote is not technically correct as there have been many contract employees released from public sector and especially local government administrative slots over the past 18 months, but Minister of Public Sector Reform Reppas has indicated that no public sector employee will be dismissed, in the purest form of cheap electoral politics. Clearly, some Greeks are more equal than others.
We are distressed by the relaxed approach the PASOK elements in the current Greek government have taken to mergers and eliminations of non-essential public sector entities (originally laid out under George Papandreou and handed to Vice PM Pangalos for actual implementation), choosing to “except” a large number of the personnel that had been designated for firing or the “labor reserve” once their employing agencies were abolished/merged.
As Solon beautifully expressed in last month’s Private Sector Death Spiral posting, the current existential financial crisis in Greece has become an opportunity for the Public Sector to squeeze the life out of the remaining private sector, with the apparent blessing (or gross negligent disregard) of “The Troika.” The insanity of this situation ought to be self-evident. We are frequently asked why the Troika allows such back-pedaling on administrative reform. It is as if “Reform” in Greece has taken a page from Stalin’s Five Year Plan playbook. Stalin destroyed the kulaks, the small independent farmers, to finance his industrialization drive. In Greece, the private sector and the entrepreneur might not be going to the gulag, but they are increasingly out on the street, homeless, in order to finance the unproductive but protected Public Sector. This lack of logic would offend even Stalin.
Not only do figures like those quoted by The Economist demonstrate that the purpose of reform has been defeated and perverted, it also opens wide the possibilities for severe social unrest, as the private sector who suffers the bulk of the pain sees that the Public Sector is either partially shielded from its effects, or, more ominously, dishes it out. All of this at a time when Greece, still in extensive deficit spending mode, needs international support to pay monthly pensions and Public Sector salaries. Greece deserves better.