Government pushes stalled public sector cuts

With the date of the troika’s return to Athens still uncertain, the government pressed on with pending economic reforms on Wednesday, submitting a bill foreseeing the closure of 23 state organizations to Parliament. A long-delayed streamlining of the civil service – with thousands of layoffs – is one of several pledges the government has been under pressure to enforce in exchange for continued rescue funding from international creditors. However, with local and European elections looming in May, government officials have been reluctant to strike against the civil service. A vote in Parliament on the closure of 23 bodies is expected to be tense.

Most of the organizations slated for closure are either redundant or underperforming and have been targeted by troika officials seeking to cut wasteful public spending. The organizations include the Greek National Road Fund (TEO), the National Book Center of Greece (EKEBI), the Company for the Unification of the Archaeological Sites of Athens (EAXA) and an organization for the maintenance of Lake Kopais in the prefecture of Viotia, which dried up many years ago.

The Administrative Reform Ministry did not state how many employees will lose their jobs, noting simply that the 23 organizations were being abolished “as they are no longer deemed necessary” and that “some of the staff will be removed.” Employees of strictly state organizations are to join a so-called mobility scheme of forced transfers and layoffs while staff at state-backed private companies will be dismissed, according to the ministry’s plan.

Troika-mandated public sector cutbacks have been vehemently opposed and resistance remains strong. Civil servants have appealed against cuts to their salaries and pensions, and some have been vindicated in court. The financial implications of the court decisions are to be discussed in talks with troika envoys when they return to Athens, along with a funding gap and other reforms including pressure for restrictions on mass layoffs in the private sector to be eased.