Further wage cuts in public sector mulled

Further substantial to civil servants? salaries could be required when the government draws up its unified pay structure for the public sector in the next few weeks unless the government can convince its lenders that this year?s deficit target should be relaxed.

Sources told Kathimerini on Tuesday that the European Commission, the European Central Bank and the International Monetary Fund, known collectively as the troika, are likely to pressure the government over the merging of public bodies.

However, it is not yet clear how much pressure the troika is going to exert over public sector salaries. Greece has been set a target of reducing its public deficit to 7.6 percent of gross domestic product by the end of the year but the worsening state of the economy, which may contract by more than 5 percent this year, is likely to mean that this goal cannot be reached.

If the troika plays hardball and insists the government meets the agreed figure, then further wage cuts in the public sector are likely to follow.

If Greece?s lenders show flexibility, then the government is not likely to introduce serious wage reductions for civil servants, whose pay has been cut by up to 30 percent since last year.

Ministers are in the process of drawing up an across-the-board wage structure for the civil service, which would apply not only to the narrow public sector but also to public enterprises, such as utilities, clerics, parliamentary staff and court employees. The reforms will also see 100 of the 104 supplementary payments that apply in the civil service being scrapped.

The troika is pressuring the government to set a specific timetable for the merging and scrapping of dozens of public sector organizations as part of cost-cutting measures. Sources said that officials representing the Commission, ECB and IMF who are already in Athens have asked each ministry to provide a list of the bodies that will be downsized or closed.

Despite these ongoing talks about reducing costs, Alternate Development Minister Haris Paboukis said yesterday that there is an ?absolute demand? for the Merchant Marine Ministry to operate again as a separate department. PASOK incorporated the ministry into other departments when it came to power in 2009 but Paboukis said that ?everybody? supports the idea of reforming the ministry and giving it responsibility over the coast guard, which currently falls under the jurisdiction of the Citizens? Protection Ministry.