So the Greek Parliament managed to cobble together enough MPs to pass the latest “austerity” plan – which has little chance of surviving upcoming elections in April anyway, but we’ll leave that aside for now.
The Anthem News has the details on the latest plan, which ostensibly includes – finally – firing 150,000 bureaucrats. Not so fast (from the second pdf file embedded in the link):
We remain committed to reduce general government employment by at least 150,000 in the period 2011 -2015. To achieve this target,we will continue to strictly apply the existing 1:5 hiring to attrition ratio as well as the newly established pre-retirement scheme, and reduce contractual employment, and furlough enough redundant public employees into the labor reserve by end-2012 to achieve 15,000 mandatory separations (i.e. once their time in the labor reserve has been exhausted).
For the uninitiated, the “labor reserve” is a one-year period during which a public sector employee is paid 60% of his/her annual salary without having to work, and can then snap up any open position or simply retire. So once again, no one in the Greek bureaucracy is actually fired.
The rest of the agreement talks about eliminating overlapping agencies (an excellent notion) and some more leeway on private contracts (also good), but overall, the regulative power of the Greek bureaucracy remains undiminished. The Greek people are once again being sold big-government-on-the-cheap.
Meanwhile, tax “reform” continues apace – basically an attempt to end massive tax evasion. That’s fine as a matter of legal policy, but like every other de facto tax increase, it won’t get nearly the amount of revenue projected, because with higher taxes comes higher tax avoidance (in this case, legal or illegal). Combine that with the Greek government still at massive size, and we have a recipe for continuation of the Great Greek Depression.
Greece might have been able to spare itself this nonsense by genuinely reducing the size and scope of its government. She might have been able to escape this fiasco had she been honest enough to recognize that joining the eurozone was a mistake. Since her elected officials (center-left, center-right, and far right) seem unable to do either, she is stuck.
The only winners in this are the Eureaucracy, which gets more powerful and influential by the day. Even the Germans have lost control of the script (Spectator, UK).
Cross-posted to Virginia Virtucon
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[...] “austerity” (higher taxes, lower bureaucrat salaries, but hardly any reduction in the size or scope of national governments), the FU will simply lead to a vicious cycle of tax increases that will [...]
[...] “austerity” (higher taxes, lower bureaucrat salaries, but hardly any reduction in the size or scope of national governments), the FU will simply lead to a vicious cycle of tax increases that will [...]