Putting a cap on incentives

Once Greeks have put an end to their economic dependence and, hopefully, got down to rebuilding the country for their own good, and that of their children, we will have to fix a number of fundamental distortions and injustices.

As I sat down to read the so-called multi-bill that is being put to vote today, I was shocked to find out that the manager of Greece?s health system (ESY), a position that requires someone with a strong resume and considerable experience, gets a monthly salary of 1,655 euros. Meanwhile, a doctor serving a residency receives 1,007 euros.

You can add all the benefits you want, but the fact remains the same: It is unacceptable that a person in a key post such as managing the country?s health system only receives some 648 euros more than a doctor in residency.

The Greek political system has tried to keep a narrow gap between wages at the top and the bottom of the wage scale. This, however, has been disastrous in terms of creating hierarchies and for providing incentives for the hardworking among us.

I was also shocked at the new salary for the chief of the National Defense General Staff, which is now set at 1,873 euros ? that is 1,000 euros more than a second lieutenant. We are talking here about our top general, the man who is expected to lead the country?s military if the country should go to war. It?s outrageous that the political class is doing everything it can to avoid sacking civil servants who were hired through the back door and who fill nonessential positions while, at the same time, horizontal cuts are unmaking the country?s education, health and, to some extent, judicial systems.

Now that populism is king, the popularity of such one-size-fits-all solutions is on the rise too. The government recently announced a cap on salaries for general secretaries, public utility (DEKO) managers, state bank chiefs and so on.

However, when you set such a low ceiling on the salaries of people who are administering millions of euros, one thing is bound to happen: The jobs will be claimed by party cronies and people outside the market, thus inviting more corruption into the system.

Reforms, growth, law and order and a workable health system cannot possibly be implemented by a state that relies on badly paid people at the top of the pyramid, by a state that offers no incentives to those who work hard, by a state whose failures are pushing doctors, policemen and teachers to starvation or corruption. However, the multi-bill must be passed before the mistakes can be corrected.

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