Mergers to streamline state bodies

Cabinet approves plan to slash the number of government agencies; some hope for budget relief

The government gave the green light yesterday for the merger of hundreds of state bodies and organizations in a bid to cut spending in the public sector.

Economy and Finance Minister Yiannis Papathanassiou said the plan involves the merger of 255 state bodies – out of the 620 that were examined – over the next four months.

“We are implementing a program that is very necessary... not only to save resources but also to attain more efficient governance,” Papathanassiou told reporters after a Cabinet meeting.

No details were given concerning who the mergers would affect or the amount of expected savings.

Growing expenditure on Greece’s public sector has been taking a large chunk of resources from the budget, whose deficit is widening under the weight of the slowing economy and falling tax revenues.

It is estimated that fiscal imbalances in Greece will this year result in a budget deficit of 5.1 percent versus 5 percent in 2008, according to the European Commission.

Earlier this week, the International Monetary Fund called on the Greek government to move ahead with structural and fiscal reforms in order to head off a widening budget deficit which it anticipates will expand to at least 6 percent of gross domestic product this year.

Government spokesman Evangelos Antonaros said yesterday no jobs will be lost as a result of the state merger plans.

“I am certain that these decisions in no way compromise workers’ rights,” said Antonaros.

Asked whether the government was also planning to merge some ministries, he refused to be drawn, saying only that “this is an unrelated issue.”

Government sources said that lossmaking state companies will be the first to be merged and that staff members will be transferred to other public services.