According to a Greek newspaper poll last weekend, 70% of the population back the government’s plans to cut public sector pay. But to union leader Christos Katsiotis the measures are “a declaration of war on the workers” and must be resisted at all costs.
The aim of the plan is to reduce Greece’s soaring national debt which has already hit 300 billion euros, in part by reducing public expenditure, 40% of which goes on salaries and pensions.
Although the official retirement ages are 60 for women and 65 for men, early retirement is common. A single mother, for example, can claim a full pension after only 15 years of contributions. This means that the average retirement age in Greece is 57. The government wants to make this 63.
32% of the Greek workforce are employed by the government. That’s 700,000 employees, and they absorb 11.8% of GDP. So the government wants to freeze salaries and stop replacing public sector workers. Bonuses are to be cut by 10% and overtime by 30%. This should mean savings of 800 million euros this year.
But that’s not all.
The government also plans a ruthless assault on tax evasion which they say is ingrained and widespread. So they are now encouraging people to collect official receipts to attach to their income tax declarations. Economists estimate that up to a third of the Greek economy functions within the black market.
Costas Bakouris, the Chairman of Transparency International in Greece, said: “The laws are not very clear, and also responsibilities are not very clear either. There’s a lot of bureaucracy and within that, people find opportunities to interpret things and exercise power and therefore citizens end up having to bribe them to do their jobs.”
Local authorities and health care services are particularly implicated. It is widely reported that doctors ask for payments in order to bring surgery forward and the Greek Prime Minister, George Papandreou, told EU leaders last December that his country was “riddled with corruption”.
Analyst Jens Bastian said: “The state is seen as inefficient and corrupt. Political and economic leaders are discredited. Because of that, the situation of give and take, that citizens receive from the state and pay their taxes in return… well, that equation doesn’t work.”
On the streets, the protesters are saying that the politicians caused the economic crisis, so why should the people pay for it?
The Prime Minister insists, however, that the plans will go forward “in every measure”.
The turmoil looks set to continue.
Greece civil servants resist austerity plan