ATHENS – Sensing a Greek recovery, European Union officials said there’s no need for more worker layoffs but that the government has to improve the quality of its notoriously-inefficient public sector.
A European Commission official told reporters, during the presentation of a review assessing the second Greek adjustment program that Brussels would not be asking for further layoffs in the Greek public sector, the Athens News Agency reported.
The same Commission official stressed that the Greek economy was starting to stabilize and that the worst was already behind it. He pointed to better-than-expected fiscal figures and noted that the progress made since July 2013 in fundamental aspects of the program had been huge. At the same time, the official stressed that “the work is not over yet”.
Greece recently concluded negotiations over reforms with its international lenders, the Troika of the EU-International Monetary Fund-European Central Bank in which it was said 90 percent of the work had been completed, clearing the way for the next installment of 8.3 billion euros in two bailouts of 240 billion euros ($330.7 billion) to be released.
Among the reforms were goals for Greece to reduce its bloated public workforce by 125,000 which the government said it had done in early retirements, attrition and finally going after those who had falsified their credentials or were not performing, although critics said many more remain and haven’t been touched.
The government also fired a slew of workers, primarily in the lowest-paid sectors such as cleaning ladies, school nurses, crossing guards, janitors, teachers and municipal police while exempting Parliament workers – who also have largely escaped harsh austerity measures – and higher-paid managers and political appointees with pull.
The EU official said that quality was more important than quantity in terms of carrying out reforms, adding that for every public-sector lay off there had been one recruitment.
Asked to comment on whether politicians or technocrats were responsible for the cost of bailing out the Greek economy, the official defended the adjustment program and said that the country’s financial state in 2010 had been so bad that some form of adjustment was unavoidable and that there had been no alternative with fewer painful repercussions.
The crisis was largely caused by alternating administrations of New Democracy Conservatives and PASOK Socialists – who are now ironically in a power-sharing coalition – spending wildly for generations and hiring hundreds of thousands of needless workers in return for votes.
Problems with the first bailout were blamed on “communication errors” by a previous government and the official said that sparked fears of Greece leaving the Eurozone as well, with most of that talk now ceasing as a primary surplus has been achieved.
Asked when Greece will be free of memoranda from the Troika the official said it was too soon to say almost most of the monies from the rescue packages runs out this year.
A decision on whether to extend the Greek program after 2014 will be taken in the autumn, when a more complete picture on the progress of reforms and the sustainability of Greece’s debt had emerged.