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Our View: Government needs to be wary of creating impression state finances in perfect shape

NO PUBLIC sector group has defended its privileges and interests with the tenacious single-mindedness displayed by state school teachers. When the troika proposed they taught an extra period a week so that the state would not have to renew the contracts of 500 temporary teachers they threatened indefinite strikes. In the end, the Anastasiades government came up with a compromise by which a small additional pay cut was imposed to cover the cost of keeping on the 500.
When it subsequently transpired the government would need only a couple of hundred contractual teachers because of the decrease in the number of students enrolled for the new school year their union bosses protested every day on radio and television shows, claiming they had been fooled by the government. Such was the pressure they applied, President Anastasiades tried to appease them by coming up with a ludicrous suggestion – the teachers whose contracts would not be renewed could be hired by the National Guard. To do what he did not say but it would appear the idea has been abandoned.
On Wednesday the leaders of primary school teachers union POED met the president to push another demand – giving permanent jobs to 300 teachers employed on yearly contracts. In the past the practice was for 100 such teachers to be hired permanently by the state every year but because it had not been followed in the last three years POED demanded the appointment it was owed was made altogether now that the state has no money at all. Astonishingly, the president promised to try to satisfy this demand. He reportedly told the union he would try to persuade the political parties to lift the moratorium on public appointments for the sake of the teachers.
This would not need troika approval as it would not incur an additional expense for the state as the 300 teachers were already receiving a state salary. The president’s irresponsibility and poor judgment is frightening. He is setting the worst possible example and undermining the government’s message about the need for cuts. The public sector, including state education, is grossly overstaffed, there is a desperate need to downsize it in order to reduce the crippling public payroll and there is a freeze on all appointments but the president wants to give permanent jobs to another 300 teachers. It is almost surreal in its absurdity.
It is a very peculiar way of pursuing the target of reducing the public sector by a thousand workers every year. On the one hand public employees are being encouraged to take early retirement for numbers to be reduced and on the other, the president wants to hire more because he cannot resist his populist urges. He may have pandered to POED in the knowledge that the political parties would not agree to lift the moratorium, but if there was such a calculation it does not honour him. What confidence could people have in a president who is playing populist games at a time the country desperately needs strong leadership?
This mindless politicking was taking place while the finance minister had still not been able to make the spending cuts of €700 million to the 2014 budget agreed with the troika. According to the MoU the budget deficit should not to exceed 4.3 per cent of GDP next year. Ministries had cut operational costs as much as they could but the savings still fell short of the finance ministry’s target. At the time this was reported the deputy government spokesman was giving public assurances that public sector salaries and pensions would not be cut. How are cuts going to be justified when the president is acting as if the state has unlimited funds and wants to hire even more public employees?
The 2014 budget needs to be finalised and submitted to the Council of Ministers for approval at the beginning of October so it could subsequently be debated in the legislature. However ministries have been unable to make the necessary cuts to their respective budgets, claiming there is no more ‘fat’ left to get rid of. We very much doubt this is the case, but if it were there is a very simple and easy solution – the government could cut an extra two or three per cent from public employee salaries and pensions (including those of teachers) and meet its €700 million cuts target.
There would be no need for the finance minister to keep haggling with every ministry over cuts while public employees’ would still be the best-paid workers in the county. But it might be difficult to impose this tidy and sensible solution when the president wants to appoint more employees and his spokesman has ruled out pay cuts, both creating the false impression that public finances are in perfect shape.

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