Facing the challenge of paring back Greece’s public workforce

ATHENS — Greece’s Parliament last month approved the first official culling of the country’s bloated public sector. The move, opposed by government workers but viewed by many economists as long overdue for an indebted economy, will push 25,000 civil servants into a “mobility scheme,” giving them eight months to find work in another state department or get fired.

Kyriakos Mitsotakis, the young Harvard-cum-Stanford educated economist who fills the country’s least coveted government job — as minister of administrative reform, a stuffy-sounding title that puts him in the thick of controversy — spoke last week to The Times about efforts to pare back public employment, the controversial closure of the state broadcaster and the tough austerity measures demanded by international lenders.

State statistics show about 1,000 private sector employees losing their jobs daily since the start of the crisis in 2009. How many have been forced out of the public sector in that same period?

The public sector has been reduced significantly. The government has been applying a 1-to-5 attrition rule [one person hired for every five who retire]. At the same time, it has reduced temporary contracts and has not renewed fixed-term contracts. We are on track to achieve a reduction in the number of civil servants by 150,000 by 2015.

So, no one to date has been fired from the public sector?

That is absolutely correct.

You’re being asked to deliver on something that three previous governments did not do, even on a smaller scale, in the past three years. Can it realistically be done?

I was appointed to this position in order to implement long-overdue reforms in Greek public administration, and I want to assure you that I have embraced this task with determination and resolve.... It is true that we missed the end-June target for transferring the required 12,500 employees to the mobility scheme.

In order to get back on schedule regarding public sector mobility, we will place 4,250 ordinary employees in the mobility scheme by end-July and 8,250 by end-September. Another 12,500 will be placed by end-December 2013.

Do the 2,700 employees who were sacked in the sudden closure of the state broadcaster fit into this scheme?

They were fired. Some will have the opportunity to apply for rehiring, but there are no certainties.

Just last month the government nearly collapsed when it shut down the state broadcaster. Do you think the government can survive another, possibly even bigger backlash?

There is a silent majority in Greece that understands that we can no longer sweep the mistakes of the past under the rug. For a long time, there was a sense in this country that bad habits would with the benefit of time just disappear. Today, the majority understands very difficult decisions must be taken and that vital reforms can no longer be put on the back burner.

Whether the employees are rehired or not, 25,000 jobs will be terminated by the end of the year, as the bill says, correct?

This is not true. Public sector employees placed in the mobility scheme will have their wages reduced by 25% and will go through an assessment process, within an evaluation framework to be established by end-September, before being reallocated to new posts. Only a fraction of employees placed in the mobility scheme will be destined to exit the public sector.

How does that make the public sector more efficient? Are these underperforming, political hires?

Throughout the past decade, I have repeatedly spoken openly and clearly about the need for administrative reform in the public sector, not only to make it more efficient per se but to help it promote competitive private sector economy.

This message is ever more relevant today, as Greece is paving its way out of recession, trying to create economic growth and new job opportunities. Setting up a transparent and merit-based appraisal framework should help improve individual performance and increase accountability and efficiency in the civil service.

With official unemployment at 27%, how wise is it on behalf of lenders to be demanding this from Greece now, and you likewise to be accepting it?

First of all, this is not a new demand; it goes back to commitment the Greek government signed up to in February 2012. Secondly, for every one of the 15,000 who exit the public sector, another one will be hired, adding new talent and skills to the Greek civil service.

Thirdly, dismissals due to disciplinary offenses will be one of the main pools for the direct exit from the civil service, and this is something long overdue. Those public sector employees facing disciplinary review, or who entered presenting fake credentials, or who have abused legal loopholes to make temporary positions into almost permanent, have to go, and I believe that the Greek society will embrace this move.

How much will this cost the state, and how much does it stand to save?

As I mentioned earlier, it is not a matter of achieving savings, but creating a public administration that is effective and serves the needs of the Greek people.

Municipal workers and teachers are being targeted first. Who’s next, and is there a no-go area?

The mobility pool will primarily be used as a tool for reallocating employees within the public sector. The procedure for examining all pending disciplinary cases has been accelerated.... The mobility scheme will proceed quickly, and the various ministries in Greece will have to do their part to make sure that civil servants are transferred from positions where they are not needed to positions within which they can be truly productive and serve the needs of society, as well as fully address the functional requirements of the state.

Have you ever been fired?

I have found myself between jobs, and I know what an awkward period it is. [But what is] far worse than being fired is not being able to find a job.... Over 1 million Greeks today are unemployed as a result of the financial crisis.

This is absolutely unacceptable! I have taken on the task to reform public administration because this is a vitally necessary condition for a private sector economy that is robust, that creates jobs, that is open, free and competitive. In order move out of recession and back into growth, in order to create new jobs, we must correct the mistakes of the past, including putting an end to a bloated public sector under the shadow of political favoritism.... There is simply no other alternative.

Carassava is a special correspondent.