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Our View: Can we believe anything the government says?

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Finance Minister Makis Keravnos

Talking about the state budget for 2024 at the House finance committee on Monday, Finance Minister Makis Keravnos said he was worried about the increase of the public payroll, which stands at €3.7 billion and accounts for 30 per cent of state spending.

This trend cannot continue because it would create problems, Keravnos said, adding that “I have not received, nor would I accept additional demands from the unions of public employees, apart from the A2-A5-A7 pay-scales, on which there are some people with very low salaries.” The ministry would look at this issue, “cost it and see how it would be implemented, from when, and in a way that would not have serious consequences.”

Inconsistency appears to be Keravnos’ style. He was worried about the increase in the public payroll, would not accept additional demands from the unions but would look at ways of increasing the salaries of public employees on the A2-A5-A7 pay scales. It is an example of the government’s tendency for mixed messages – he will not accept demands but also satisfy demands in the public service.

It was a similar case with the Cost of Living Allowance, which Keravnos also spoke about at the legislature on Monday. He said that it was a matter of concern for the labour ministry which was thinking that, “in the next stages, CoLA must be linked with productivity and other parameters so it would be more effective, instead of contributing to inflationary tendencies.”

So why had the labour minister sanctioned the increase in CoLA (from 50 to 68 per cent of the cost of living index), a few months ago, without linking it to productivity and other parameters? Surely, that was the time for the government to push for such a link, instead of giving in to the unions’ demand without seeking anything in exchange. Is Keravnos under the illusion that once the unions were given CoLA without any conditions, they would agree to link it to productivity, something never done before?

This is consistent with the policy of contradictory messaging. The government wants CoLA linked to productivity, but a few months earlier it agreed to increase it without linking it to any parameters. It is the same approach taken on the support measures. While it was opposed to across-the-board measures for helping people cope with inflation, repeatedly stressing that it supported targeted measures for low-income earners, last week the government announced across-the-board measures.

While it makes a habit of saying the right thing about the economy, its decisions are very rarely aligned to its words. In fact, there is a gulf separating the government’s stated positions and its actions, which keeps eating away at its credibility and trustworthiness. If this continues, eventually, people will believe nothing the government says.

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