Greek opposition publishs counter proposal : Kyriakos Mitsotakis: "Lower state expenditure"

The greek opposition now published an own "counter proposal" to put pressure on the greek government. The greek Member of Parliament, Kyriakos Mitsotakis, argues for more cuts on the spending side. Read his full proposal as an op-ed in english here.

Kyriakos Mitsotakis
Kyriakos Mitsotakis is a greek MP for Nea Dimokratia. He has been a minister in the Samaras government until January 2015 and was responsible for administrative reforms.
Kyriakos Mitsotakis is a greek MP for Nea Dimokratia. He has been a minister in the Samaras government until January 2015 and was...Photo: Reuters

Greece is alarmingly close to a calamity that will cut the country off from the European core indefinitely.  Everything that the Greek people have strived for in the past decades may readily disappear in a matter of a few weeks, turning Greece into a laggard country in the Western Balkans.  This would constitute an immense national tragedy. Is this what our great nation deserves? It follows that everyone now should speak up to save our nation. History will not be kind to those of us who do not take a stand while everything around us collapses.


Although parties in the Greek Parliament have not been duly informed about the details of the negotiations with our creditors, I have submitted, in my public remarks, a series of measures leading to fiscal equivalents, which, if adopted by the government, may very well lead to the successful conclusion of an agreement.  I submit the totality of my proposals in this article because I wish, with a great sense of responsibility at this critical juncture, to contribute to the conclusion of an immediate agreement.  An agreement to the benefit of Greece.


My main concern involves closing the fiscal gap, which still remains the most difficult yet pivotal part of the negotiation.  I want to be abundantly clear: increasing taxes is not our only option. Instead, we must attain fiscal adjustment by addressing the state’s expenses.  The private sector can no longer bear the burden of an inefficient and ineffective state mechanism.  Measures we have shied away from implementing in the past need to be executed now.


My proposal is based on five initiatives that together add up to an estimated benefit of nearly 2 billion Euros to the budget. These measures would substitute some utterly unreasonable alternatives that are currently on the negotiating table such as reducing low-level pensions and increasing VAT in energy by 10%.


1. Removal of special benefits to certain public sector employee groups


My recommendation is for targeted measures that rectify a series of unfair distortions in the public sector wage grid.  For example, over 60,000 employees enjoy special benefits over other employees whilst maintaining identical qualifications and seniority.  These benefits are estimated at nearly 200 million Euros. Another 200 million Euros can be saved through the universal implementation of the wage grid across all government entities.


Throughout the public sector there are countless examples of unfair and unequal payroll benefits and a host of non-payroll benefits that are a testament to the cronyism of the past. Therefore, there are ample opportunities for further rationalization with respect to budgetary allocations, both within the core of the public sector and beyond it, such as in regional governments and municipalities.


2. Abolish immediately all early retirement benefits with no transition measures


It is completely unimaginable that even to this day, early retirement exceptions exist in an insolvent social security system. It is ridiculous that new retirees in the past five years enjoy retirement benefits that are much higher than those of older retirees. This is fundamentally unjust and must end. In doing so, it is estimated that we can save at least 300 million Euros from the state budget.


3. Implement the “zero deficit rule” in supplementary retirement benefits


This measure could save 300 million euros. Any reduction of supplementary retirement benefits would be minimal, and Greek taxpayers will not be called upon to cover funding gaps that should anyway be filled by employer and employee contributions.


4. Abolish annual state contribution to the Employee Insurance Fund of the public electricity company


The state budget contributes 600 million Euros annually to the Employee Insurance fund of the public electricity company. It is time that this privilege, first introduced in 2000, be abolished. Moreover, it is my recommendation that the emerging gap should be covered by the proceeds from the conclusion of the privatization of one entity of the public electricity company known as “small DEI”.


5. Convert contributions towards third parties into contributions towards all


In many of their everyday transactions, citizens are unknowingly contributing indirectly to third parties. Hundreds of contributions exist on behalf of the public sector, municipalities, unions, syndicates etc. Essentially, these contributions reflect exclusive privileges that have been established over time that favour special interest groups. They add up to approximately 300 million Euros and until they are fully abolished (as they should be), they should be transferred at the first instance to the state budget in support of all citizens rather than just a few.


These are only just a sample of a range of measures that can produce savings by lowering state expenditure, eliminating privileges and correcting imbalances. What this does assuredly prove is that, even at this late our, solutions do exist and are at our disposal in order to save our country.


Reducing expenses is fiscally far more effective than increasing taxes. The fact that certain clientelistic relationships shall be distorted and some interest groups that have supported the government of SYRIZA will now be affected, should not trouble us at a time that the country finds itself at the edge of an abyss. The great tragedies that have marked the history of Greece were not the result of a plan, but rather of a series of highly unfortunate mistakes that isolated us from our allies and led us to destruction.


I am not sure whether the current government can, wishes or would be able to implement the measures that I propose. If they cannot, the Prime Minister should admit so openly while there is still time. It is often said that there are is no dead end in a democracy. But if our democracy is ruined, even its most populist elements will not be able to provide a solution. Mr. Tsipras must sign a deal along the lines that I am recommending, even if he feels unable to implement such measures himself. 

This translation is authorised by Kyriakos Mitsotakis. The original was published in greek at "Kathimerini".

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