With the proposed Greek austerity plan of new taxes, spending cuts and a privatisation scheme it seems inevitable that this will lead to recession, civil unrest and ultimatley debt default. In the next few months its debt is due rise to above 160% of GDP which many believe is unsustainable – see graph below.
However when you look at the finances/actions of government departments it is not surprising that Greece has arrived at this juncture. Here are some examples that I’ve picked-up from various websites:
Paying dead people
The Greek government has been paying 500 pensioners over the age of 110. Apparently, 300 of them have already passed away. Some money deposited into these accounts were withdrawn while others remain untouched. About 40,000 women benefit from the allowance at an annual cost of around 550 million euros
A bonus for: using a computer; speaking a foreign language; and working outdoors
In a system where bonuses can add 5 to 1,300 euros to a monthly paycheck, some civil servants are paid extra for using a computer. Some get a bonus for speaking a foreign language and others for arriving at work on time, while many foresters get a bonus for working outdoors.
Olympic was sold in 2008, but only after the state lavishly compensated or re-hired about 4,600 employees. Many blocked Athens’ thoroughfares recently because they had not received all their severance money.
According to the OECD the Greek government owns 74 companies, mainly utilities and transport firms, many of which are overstaffed and loss-making. In fact the Greek finance minister claimed that he could save money by closing the railways and driving its passengers around in taxis. He was told that he was exaggerating the issue but the facts don’t lie:
2009 – Greek raliway collected €174m in fares and other revenues BUT it spent €246m on wages. Overall it lost a total of €937m
Tensions with arch-rival Turkey have kept Greek military spending well above that of other EU members, reaching 14 billion euros, or 6 percent of GDP, in 2007 and 2009. But nearly 80 percent of Defence Ministry spending goes on administrative costs and payments of army staff.