Almost four years into the debt crisis – and with bailout loans due to end next May – creditors have become increasingly impatient with the slow pace of progress in streamlining the 800,000 strong public sector. Almost all the approximately 130,000 Greeks who have left the service have been retirees – in sharp contrast to the private sector where job losses have soared.
In a move adding to pressure on the governing coalition, the German finance minister, Wolfgang Schauble, will visit the country on Thursday. Greece has received €240bn in emergency rescue funds, the biggest bailout in history, since the eruption of the crisis in late 2009. By the end of the year its debt-to-GDP ratio is expected to reach 180%. Last week, after a round of frequently fraught negotiations between the country and visiting Troika chiefs, eurozone finance ministers agreed to disburse an additional €8.1bn vital to paying salaries and pensions. But the conditions attached have raised fears that the crisis-hit nation is being pushed too far. Last month the conservative-dominated administration almost collapsed after Samaras attempted to cut the public payroll by shutting down the state broadcaster, ERT, overnight.
In the upheaval that followed the small Democratic Left party abruptly withdrew its support leaving the coalition with 155 seats in the 300-seat house. Commentators questioned the wisdom of inflicting further austerity on a nation where more than 1.3 million are out of work, salaries have been cut by an average 25%, and poverty has been imposed on more than a third of the entire population. "I can understand, in principle, where the Troika is coming from and the pressure the government is under but the timing is very unfortunate," said Dr Thanos Dokos, director general of Eliamep, Greece's leading thinktank. "If they had done this two years ago it might have been acceptable but not now."
Under the scheme some 25,000 public employees will be placed on reduced wages in a so-called "mobility pool" by the end of the year. They will then have eight months to find work in another department or lose their jobs altogether. A further 15,000 dismissals will be made in 2014. Critics argue that entire institutions – including the municipal police who patrol the streets of an increasingly crime-ridden capital – will be abolished in the process. "Instead of only looking at the numbers, both the Troika and the government should also look at the social and political consequences of laying off so many," Dokos added. "There's a time to pick battles and it's definitely not now."
5 comments:
Greece knows the scumbags that are behind the whole debt creating money machine that is Government borrowing and is playing the bankers/investors at their own game.
Good luck to them.
At the end of the day , they will default, leave the eu, devalue their currency , then sit back and watch the tourists come flocking , and buyers come scurrying back for cheap exports, then the whore-like investors/bankers come with offerings of gold,frankincense and mhyrr and the whole cycle will start again.
Democracy is nothing but organised legal theft of its citizens
Greece must stop lobbying for a second restructuring of its debt. We have to stick to what has been agreed. Anything else is not in the best interest of Greece,” he said, during a day of political clashes in the capital. “If you take guarantees and then you are discussing a haircut, you are a liar. You will destroy any confidence.”
Mr Schauble admitted that Greece may ultimately need a second bail-out package as public debt spirals to 176pc of GDP this year, higher than when Greece first defaulted. The privatisation plan intended to chip away at the debt has stalled. Russia’s Gazprom has pulled out of a deal to buy Depa, the Greek gas utility.
I wouldnt be worrying too much about Greece , the way world debt is spiralling out of control (300% of world GDP) we.ll ALL be slaving 80 hours a week for bread and a blanket and the night sky for our roofs.
Who the hell is raking all this interest in?? Are we borrowing money from another planet or something , or is there a very small elite group of supposedly "human beings" whose only God is Compound Interest then ultimately Asset Repossesions???
G20 discusses jobs crisis in Moscow
Good morning, and welcome to our rolling coverage of the latest events in the eurozone, the financial markets and the global economy.
The global caravan of international summitry is in Moscow today, where G20 finance ministers and central bankers will discuss the jobs crisis, against a backdrop of 60% unemployment in Greece and Spain.
US treasury secretary Jack Lew has issued a brisk message to the Europeans to pull their socks up and get the economy moving again.
Lew writes in the FT (£)
When the finance and labour ministers of the Group of 20 leading nations gather today in Moscow, getting people back to work must be top of the agenda. In many parts of the world, such as Europe, growth is too weak to drive job creation, and it is critical to take steps to bolster private hiring.
We have an enormous stake in Europe's success. Recalibrating the pace of fiscal consolidation, so that a fall in activity does not require more cuts, is a step in the right direction.
Now that sounds like a warning against further austerity...
Also on the G20 agenda is a plan to close down tax loopholes used by corporations such as Apple and Amazon (more later).
Here in the UK, we are expecting an update on the public finances at 9.30
I'll be tracking events in Moscow and beyond throughout the day...
Instead of taxing profit at 25%, we should tax revenue at 5%, governments would collect approximately the same level of tax and corporations would be unable to avoid tax by;
moving profits around, writing down assets, depreciation, transfer pricing, etc, etc.
Companies would pay tax depending on how big their economic footprint is, rather than how profitable they are.
Also under this kind of framework, in times of economic weakness corporations would still pay their fair share to society rather than avoiding all tax just because their profits have fallen to break even.
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