Planned civil service pay cuts denounced by coalition partner, unions

TAGS: Economy, Justice, Society, Diplomacy

With time pressing on the government to introduce changes to special special pay structures, its financial team has found itself up against cabinet ministers and labor unions that vehemently oppose any changes that would further diminish their incomes.

Uniformed officers, judges and state doctors have all voiced objections to the proposals made by the Finance Ministry, while the leader of the junior coalition partner, Panos Kammenos, has already written to Prime Minister Alexis Tsipras expressing his disagreement.

Even though special pay structures are not included in current talks with creditors and will feature in the second bailout review, the Finance Ministry is keen to include the changes – which will come into effect on January 1 – in the draft of the new budget (to be submitted on October 3), and the revised midterm program.

The government is also looking to meet a September 30 deadline to come up with measures offsetting the impact of a two-year freeze on pensions calculated on the basis of special pay structures.

But it will be a tough sell for the government, as was evident in a meeting on Tuesday between Alternate Finance Minister Giorgos Houliarakis and labor unions representing judges and prosecutors, who dismissed the scheme.

They said it would lead to further wage cuts, on top of reductions of up to 50 percent in recent years.

They also demanded the implementation of court decisions that ruled wage cuts introduced in 2013 were unconstitutional – which would also entitle judges and prosecutors to back pay. 

Echoing the same sentiments, hospital doctors said the new plan would slash their salaries by a further 20 percent.
According to the federation of hospital unions, doctors’ wages have plummeted by at least 50 percent since 2010.

Meanwhile, the government, which is again coming under increasing pressure from eurozone officials over the slow pace of the reforms, received another blow on Tuesday after the country’s creditors shot down two pledges made by Tsipras at the Thessaloniki International Fair on Sunday.

He promised protection to businesses from bank account confiscation and incentives for the disclosure of undeclared incomes.

According to sources, creditors argue that both measures will let businesses that evade taxes off the hook.