August 30, 2017 / 5:09 PM / 4 months ago

Greece offers latest effort to reform public sector, a key bailout demand

ATHENS (Reuters) - Greece’s government presented a three-year plan to overhaul the country’s public sector on Wednesday, the latest attempt to fix a problem that helped plunge the country into its worst crisis in decades seven years ago.

Athens, which has signed up for three international bailouts since 2010, has promised its lenders to shrink and modernize its administration to cut costs, make it more efficient and end a legacy of patronage hiring.

The leftist-led government says it aims to evaluate and educate state workers, distribute staff according to the sector’s needs and seek candidates with digital skills, create online databases and simplify regulation by 2019.

“We are addicted to doubt, it’s a reflex, when political leaderships announce a public sector reform,” said Administrative Reconstruction Minister Olga Gerovassili, promising that by 2020 the Greek state sector will be independent and de-politicized.

Despite repeated reforms, the public sector continues to underperform. Corruption is still a problem, red tape blocks reforms and the use of electronic data systems remains limited.

Overhauling it has been a tough task mainly because of political and union resistance. State workers are protected from firing by the constitution, a right established more than a century ago, and such layoffs can be challenged in Greek courts.

Before the financial crisis, the public sector was a safe haven for many Greeks and for decades the political elite used the system to secure votes, often just before elections.

Over the years, it grew uncontrollably, and in 2010, when Greece signed up to its first bailout, the government had to conduct a census to find out it was employing almost a fifth of the country’s workforce, then about 4 million people.

The wider public sector has shrunk by about 18 percent since then, according to government data, mainly due to early retirements and a cap on hirings. In 2016, it employed 565,671 people, according to government data.

But opposition parties say the government, which came to power for the first time in 2015, has brought little change and continues political hirings. It denies the allegations, saying that decades of socialist and conservative rule are behind the sector’s woes.

Reporting by Renee Maltezou, editing by Larry King

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