[Marxism] Greece: “They’re bigger than us, but we’re angrier”
lnp3 at panix.com
Fri Jun 13 09:31:58 MDT 2014
NY Times, June 13 2014
Greece Wars With Courts Over Ways to Slash Budget
By NIKI KITSANTONIS
ATHENS — The Greek government has made a range of painful cuts to
salaries, pensions and jobs for public workers over the last four years,
saying they were needed to satisfy the demands of the international
creditors that bailed the country out. But the Greeks hurt by those
steps, and the nation’s courts, have a different idea.
Steadily, citizens groups — including police officers, university
professors, cleaning workers and judges themselves — have challenged the
cuts as illegal or unconstitutional. And in case after case, Greek
courts have agreed, presenting a nearly existential question for the
government: Can it actually shrink the state?
The mounting pile of judgments has now become a serious obstacle to the
austerity drive of Prime Minister Antonis Samaras, with the
International Monetary Fund warning this week that the “adverse court
rulings” threaten to undo the country’s reforms, which its creditors are
scheduled to begin reviewing in July.
Coming just as an embattled Mr. Samaras tries to convince citizens and
investors that Greece is finally turning a corner, the rulings threaten
to punch a gaping hole in the finances of the government. Besides
potentially having to reverse many of its public-sector layoffs, Greece
could be obliged to scramble for one billion euros, about $1.35 billion,
in back pay.
“They’re bigger than us, but we’re angrier,” said Despina Kostopoulou,
53, who worked at the Finance Ministry as a cleaning woman for 22 years
before she was laid off last fall. In May, a court ruled that she and
396 of her fellow workers were unfairly dismissed. Since then, she has
been sleeping in a tent outside the ministry’s offices, brandishing mops
and demanding, along with her co-workers, that the ministry rehire them.
The David-and-Goliath-style standoff has turned the cleaning women into
unlikely symbols of resistance to the austerity measures that Mr.
Samaras insists have gradually allowed Greece to resume control of its
finances, return to bond markets and report a primary surplus — a budget
in the black before debt payments — of about $2 billion.
But those same steps have also slashed Greek incomes by a third, driven
unemployment to around 27 percent and left the population fuming.
Other countries that have enforced austerity programs have witnessed
similar popular challenges and clashes between the government and the
judiciary. In Portugal, which recently emerged from its foreign bailout,
a top court rejected cuts to salaries and pensions in May, prompting the
government to scramble for alternative measures amid feverish
speculation about tax increases.
Some of the rulings that have gone against the Greek government have yet
to be officially announced or are being appealed. An initial appeal of
the decision on the cleaning workers was rejected in May; a second
appeal was upheld in a ruling on Thursday by the Supreme Court. A final
decision is now expected in September, when many expect that the
cleaning workers will be vindicated.
Many of the rulings against the government may ultimately be upheld by
Greece’s highest courts, experts said. That would leave the government
at a legal dead end and with little other choice, if it is to satisfy
its creditors, than to defy the rulings or look for cuts in other
places. Either option could further stoke public anger and spark fresh
legal appeals by other groups of citizens.
“This is an avalanche that’s started,” said Jens Bastian, an economic
consultant and former official on the European Commission’s task force
for Greece. “It’s not going to stop.”
Already, the number of challenges to the government’s austerity efforts
is growing, and its losses are accumulating.
In January, Greece’s top administrative court, the Council of State,
deemed that the government’s cuts to the wages of police and armed
forces employees violated the Constitution. In February, the same court
ruled that a tax on benefits for university staff members and cuts to
civil servants’ pensions were illegal. The same month, Greek Supreme
Court judges found that a property tax introduced in 2011 as an
emergency measure and later extended was unconstitutional. Another court
rejected cuts to the salaries of state hospital doctors, university
professors and, unsurprisingly, judges.
The country’s faltering privatization drive is also at risk. In May, the
Council of State blocked the sale of the state’s majority stake in the
Athens water company, with a current stock market value of around $813
million, out of concern that water quality could deteriorate under
private control. The move raised questions about whether the government
can meet a target to sell off $2 billion worth of assets in 2014.
According to analysts, the decisions could upend Mr. Samaras’s progress
in putting the economy back on track. Achieving a budget surplus was a
precondition for the start of talks in the fall among Greece and its
euro zone partners on lightening Greece’s debt load.
In its report on Greece this week, the I.M.F. expressed concern about
Greece’s “very high” debt, which stands at about 175 percent of economic
output, and said a “dramatic improvement” in the efficiency of its
public sector was still needed to avoid further austerity measures. If
the courts roll back the government’s reforms, compensating measures
will be necessary, it said.
In any case, European officials recently repeated their view that Greece
is likely to need a third, much smaller, bailout in addition to the two
loan agreements worth a total of $325 billion it has already been
granted since 2010 by its so-called troika of creditors — the European
Commission, the European Central Bank and the I.M.F.
“The rulings have immediate implications for Greece’s fiscal strategy
and revenue projections, which must be revised,” Mr. Bastian said.
“Privatization targets are constantly being revised downward and tax
collection is difficult, as people can’t pay,” he added, referring to
public debts to the state that have topped $89 billion and are rising by
$1.35 billion every month.
The string of legal decisions has wrought political damage, too, on a
government that has been left wobbling from the victory of the leftist
opposition party Syriza in European Parliament elections last month. Mr.
Samaras carried out a thorough cabinet shuffle on Monday, installing
Gikas Hardouvelis, a respected economist and former government adviser,
as finance minister in an attempt to breathe new life into an
administration tainted by government austerity programs.
The resilience of the cleaning workers at the Finance Ministry has
proved to be an embarrassment, and may signal complications to come.
A ministry official, who spoke on the condition of anonymity, said a
reversal of the cleaners’ dismissals could gut the “central tenet” of
the government’s plans to trim the public sector — its “mobility scheme”
— that began last year. The measure requires placing 25,000 civil
servants on reduced pay for eight months before dismissing them if they
cannot find another public-sector job.
That plan is in addition to the layoffs of 15,000 public-sector workers,
11,000 of whom are supposed to be let go this year. Short of dismissing
the cleaners, “the alternative was to dismiss tax collectors,” the
official said, noting that a private firm is doing the cleaners’ job for
a third of the cost.
Experts say the government’s imposition of these measures will probably
result in more rulings in favor of public-sector workers, presenting it
with the difficult choice of defying Greek courts to placate its foreign
creditors or giving ammunition to austerity protesters.
“The government is in a state of emergency, so it is violating the
Constitution,” said Aristides Hatzis, a professor of legal theory at the
University of Athens. But the courts will continue to block measures
that violate laws, he said, adding: “The judges are doing their job. The
demands of the troika are not their problem.”
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