Greek government has raised public enterprises issue to the greatest challenge of the Memorandum of Understanding. The course of its interventions, which are under preparation, will determine the sack of civil servants and the cutting of benefits.
The Special Secretariat of Public Enterprises and Entities has gathered details of revenues, expenses and assets of any listed and non-listed SOEs. The recording of data continues in the broader public entities.
IMF/EU/ECB representatives were clear last week: the government should proceed with immediate wide interventions to raise at least €2.5-3b, or the revenues should be raised from somewhere else.
Finance ministry officials believe that the political and social costs will be smaller if major interventions in SOEs are launched, rather than government implementing its commitment for cutting of unemployment benefit.
The ministry announced on Monday the financial data for 18 companies that submitted monthly data for January-February 2011 period. There is a reduction of losses by 79% in February 2011 versus February 2010, while the total number of employees also reduced by 12%. Sales in February rose by 13%, however the overall decline in the two month period remains (-11%).
Officials note that the is a margin for further cutting of operating costs, as the average wage is around €40,00 a year in SOEs and €30,00 in public entities, while wages in the private sector are significantly lower. Greek government is preparing a two-level plan:
1. It will attempt to complete the interventions that were decided in December and calls for the listed SOEs to implement a new salary scale with a maximum of €48,000 in wages, while overtime and other benefits would reach 10% of the wage cost. The government plans to assert its rights through the General Assembly of the SOEs.
Public Power Corp, Piraeus and Thessaloniki Ports, Water Supply Companies of Athens and Thessaloniki and Public Gas Corp maybe left out, due to the 7% salary reduction last March.
2. Government promotes specific operational plans for each company, giving priority to those included in the deficit. It also prepares a list of public entities that can be abolished, or merged with other entities or with some ministerial departments.
In the listed state-owned companies, the change of salary system is linked to the privatization program which is in process. The cuts may be retroactive to the beginning of the year, according to a qualified official.
source: CAPITAL
