ECONOMY

All-out drive for savings is on

Deputy Finance Minister Filippos Sachinidis is trying to spur the public sector into exploiting every opportunity for cutting costs and boosting revenue collection, with a view to achieving the targets of the 2012 midterm fiscal program.

In a circular sent to colleagues and public agencies yesterday on the drafting of the 2012 budget, Sachinidis urges the adoption of initiatives for tapping the value of public property, shares and all assets in general, and making every possible saving in operating expenses. The 2012 budget will have to contain all stringent provisions agreed with Greece?s international creditors – the European Commission, the International Monetary Fund and the European Central Bank, known as the troika.

Ministries and agencies will have to stick strictly the midterm plan, which includes spending ceilings, both in the ordinary and the public investment budgets. Sachinidis stressed that the ceilings are a basic premise for the 2012 fiscal blueprint, and ministries must develop any initiative (internal briefings and distribution of circulars and decisions) that will facilitate the immediate application of the measures envisaged in the accompanying laws.

In the circular, Sachinidis urges attention to recently enacted restrictive provisions regarding both salaries and overtime pay throughout the public sector. In particular, ministries and agencies have to take into account the following guidelines:

* The rule of one hiring for every five retirements;

* Suspension of automatic three-year salary increments;

* Halving of performance incentives;

* Term contracts for 2011 are to be cut by 50 percent and a further 10 percent in 2012.

As regards operating expenses, the following guidelines apply:

* Reduction of overtime pay through the increase in normal working hours from 37.5 to 40 a week, and a lowering of the ceiling of evening working hours;

* Rationalization of consumption expenses, 20 percent cut in rents, energy and telecommunications;

* Mergers and shutting down of departments will restrict subsidies;

* Rationalization of social spending;

* Savings in health and medicines;

* Defense bill reductions.

Ministries will have to send their draft budgets to the General Accounting Office by September 15.