Greece cuts a slice from a bloated public service - Macleans.ca

Greece cuts a slice from a bloated public service

by

For the first time since Greece’s almost unimaginable levels of public dept sunk the European Union’s financial health like a anchor, the government in Athens is letting some public service workers go.

In a nation where more than one in four people are out of work, the jobless rate among government workers has been a perfect zero, thank to laws that made it illegal to fire a government employee. In the Greece of the past, the public service acted like a depository for political backers, with jobs-for-life often traded for party support. Politicians finally voted Monday to make it legal to downsize the public service.

The cuts will hit about 15,110 workers over the next two years, and 150,000 by 2015, potentially pushing the unemployment rate up to 30 per cent, as noted in the Financial Times. Compare that to the 586,000 public employees who lost their jobs in the U.S. from 2008, when the financial crisis hit, to 2012 (which doesn’t include the effects of deep government spending cuts known as sequestration). Or the 19,200 job cuts announced in Canada’s 2012 budget alone—a figure that could be closer to 28,000 according to some government critics.

What finally forced Greek politicians to turn their austerity on a bloated public service? More money. Greece now gets a €2.8 billion check from the EU bailout fund, which was contingent on the layoffs. It’s part of a €172 billion ($228 billion) bailout package agreed to in 2011, which itself is part of billions of dollars pumped into Greece since it took its first €110 billion ($145 billion) in 2010.

Considering those vast sums, and true questions now about whether the EU will survive, it’s hard to believe it took this long.

Filed under: