Governments must reform the structure of their economy in order to boost their growth and job creation mechanism, advises the annual OECD report Going for Growth, 2011.
For Greece in particular, recommendations include the reduction of regulatory barriers in the Greek market through liberalisation, the abolishment of counter motives for those wishing to prolong their professional activity beyond 65 and finally, the restriction of tax exemption and buoyant allowances (in addition to salary), by reducing the labour tax wedge and broadening the tax base.
According to OECD Secretary-General, Angel Gurria, “current European fiscal and taxation policies have reached their limits and, therefore, reform appears the only way”. For Greece the report also highlights the importance of two more objectives which will increase the quality of primary and secondary education. The first one refers to enhancing the quality of teaching, by linking it to performance benchmarking. The other objective refers to cutting down on youth and women’s unemployment through “flexicurity” and lifetime employability policies.
As far as the “buoyant allowances” Greek public servants, in particular, currently receive a number of these. And it is not a secret that at the very end, public servants earn more than the average employee in the private sector. At least 30,000 euros per year. As part of a plan to fix the nation’s ruined economy, the Greek Prime Minister George Papandreou announced recently that he aims to cut 30 percent of civil servants’ holiday bonuses which are part of Greece’s “14th salary” payment schedule.
The 14th salary works like this: Greek workers get their annual salary in roughly 14 instalments. On top of 12 monthly payments, employees receive double their paychecks in December, right in time for Christmas consumerism. They also receive half of their monthly spending in the spring to shell out on goods for Easter. Then they get another half-salary boost in July before their traditional summer vacation.
