Greece pins hopes on public sector overhaul

The coalition government aims to merge or scrap 200 public organizations by the end of August and to relax rules for private investors interested in buying stakes in “strategic” state enterprises, it emerged on Thursday.

Prime Minister Antonis Samaras held talks with Administrative Reform Minister Antonis Manitakis, who is responsible for the restructuring of the public administration. Sources said that it was agreed the government would announce the closure or merger of 60 public organizations within the next few days, with the rest coming by the end of next month.

Among the organizations likely to be merged are Helexpo, the Thessaloniki International Fair and the Organization for the Promotion of Exports as it is deemed they fulfill similar roles. Also, the three state-run construction companies are likely to be merged into one.

The government hopes that the quick closure of organizations which either do not justify their budgets or which carry out similar task to others will help convince Greece’s lenders that the coalition is taking the job of public sector reform seriously.

Manitakis said the merger of public bodies would not lead to sackings. The government has said it will achieve the reduction of civil servants requested by the troika through retirements and a strict hiring process. However, there is a technical difficulty that the coalition will have to overcome as the transfer of one civil servant from a redundant organization to another part of the public sector is considered a new hiring and Greece has committed to only taking on one new bureaucrat for every five that leave.

Manitakis informed his fellow ministers that the process of evaluating staff at government departments would be completed by December.

Sources also told Kathimerini that the government is set to quickly prepare a draft law that would remove limitations to private investment in public enterprises considered “strategic,” such as the Public Power Corporation. Currently, each investor would only be able to buy a maximum stake of 20 percent and the government would retain overall control of the firms with a 51 percent holding. However, Samaras agreed with Development Minister Costis Hatzidakis and Finance Minister Yannis Stournaras that these barriers should be removed.

A speeding up of privatizations is one of the other cards the government wants to play in its upcoming negotiations with the troika.
Source: Kathimerini