Public sector employees will be made redundant

The worst is yet to come for employees after the Finance Minister’s announcements of massive layoffs in the wider public sector.

A few hours after Ragousis’ assurances that the government does not succumb to blackmail dilemmas such as “either dismiss 200.000 workers or go bankrupt", Giorgos Papakonstantinou, while speaking at the Economist conference, made it clear that “we cannot avoid thinking of layoffs". He stressed that even transfers are no longer viable.

Specifically, he described the government’s plan to reduce salary expenditure as follows: The number of employees in the public sector is already reduced by 10%, and it should be further reduced by 150,000 by 2015. For this to happen, though, he described what needs to occur:
-   A “freeze” in recruitment.
-   Contractual agreement employees are to be made redundant.
-   Plans for voluntary retirement in the public sector are announced
-   Many public utilities and government agencies are to be shut down
-   Those not absorbed elsewhere should go through assessment and then be made redundant.

At the same time, he pointed to new salary shrinkage within the new payroll framework

G. Papakonstantinou described direct performance measures, which he will institute “here and now” in order to reduce deficits. They include selective salary cuts in government salaries and new tax collection measures.

His plans will endeavor to cover over 6 billion and a total of 26 billion by 2015. They will be included in the measures package announced within the coming days by the government. Giorgos Papakonstantinou pledged, however, that at this stage there will be no horizontal wage or pension cuts or any increases in VAT rates.