“What does he know about people trying to survive on 400 euros a month?” exclaimed on TV the plump, casually dressed, unshaven and shaking with righteous anger unionist of Greece’s Public Power Corporation. He was, of course, referring to his CEO Mr Athanassopoulos and the latter’s decision to raise the electricity tariffs for Greek households.
If a high salary makes one insensitive to the plight of the poor on wonders what qualifies the PPC employees to sympathise with their plight. Unfortunately nobody on that particular channel – or any other for that matter – felt the need to point out that the average monthly salary of the PPC employees exceeds the sum of 3,000 euros. In fact payroll costs at PPC have increased 22% since 2004 despite a 15% drop in personnel (through natural attrition not because of any managerial shake-up). This means that payroll per head has increased 37%, i.e. by 8, 5% every year. The problem with these highly paid Government appointees is not so much their behaviour as their number. There were 24,000 of them last June while best practice (as suggested in a recent report from the Booz Allen consultancy) dictates that there should not really be more than 18,000 of them.
Now suppose Mr Athanassopoulos was willing and able to do a Vourloumis and introduce a voluntary retirement programme for PPC. If that were the case the savings in the corporation’s costs would amount to some 500 million euros per annum – thus returning it to profitability and negating the need for any significant tariff increases. This would happen only if no further salary increases were granted to the remaining personnel a policy that the present CEO seems to have some difficulty in grasping let alone implementing. The conclusion is clear. Left to its own devices a weak PPC management facing a ruthless union will always give in and ruin the corporation just as ‘Olympic Airways’ was ruined.
The time has thus come to grasp the bull by the horns, as the soft-spoken but steely in his resolve Minister of Transport Mr Hadjidakis has done. First he sorted out the problems with the EU, then he made offers to the unions that some amongst them could not refuse. He then found a number of reputable airlines and firms willing to bid for ‘Olympic Airlines’. He was helped in this by the idiotic action of the dissenting unions which by their weekly sit-ins on one of the two runways at the Athens international airport have contributed to a sharp decline in passenger numbers for ‘Olympic Airways’ and an even sharper decline of any residue of sympathy some members of the public might still have for them. It becomes more and more obvious to everyone that this situation cannot continue and that the sooner the state-owned airline becomes history the better. Not that any cruelty has been inflicted on the personnel. Those who will not be recruited by the new company will be absorbed into the ever expanding Greek civil service. Mr Manolis Patestos, a unionist leader representing the dissenters, pledges that protests will continue ‘until the Government drops the privatisation plan and gives us our jobs back’. He also maintains that the Government is not entitled to sell parts of the ‘national wealth’. The fact that the airline actually costs the Government more than 1 million euros a day is obviously of no interest to him.
What emerges from all these stories is that the crux of the problem in these state corporations lies with the personnel and the unions. Vourloumis grasped this right from the beginning and although his technical knowledge in the field of telecommunications was limited (the man is a banker) his diagnosis on the ills affecting OTE was spot on. He got rid of thousands of employees through a scheme of voluntary retirement – that tempted even some unionists to join in – whose long-term benefits far exceeded its short-term costs. Mr Hadjidakis also prepared a scheme to absorb the redundant employees of the ‘Olympic Airlines’. John Maynard Keynes, whose theories are once again in fashion, had argued in favour of a ‘euthanasia for the rentier’. In Greece some courageous people have introduced and implemented schemes for the ‘euthanasia of the rent-seeker’ in the state firms.
Here then is a proposal. How about the Governement creating a special ‘Ministry of Privatisations’ with Mr Hadjidakis at its head and Mr Vourloumis (who can now leave OTE safely in German hands) as its general secretary? The Ministry would be responsible for easing the state out of the corporations under its control before these reach bankruptcy point. The Ministry could also guide the Government to start outsourcing many of its present activities. It could start with the prison system actually in turmoil. As the ‘Liberal Alliance’ point out in their well argued press release, the performance of the privately run prisons in the United Kingdom shows that such a scheme can be an inspiration for Greece. The new Ministry could start explaining that the provision of services by the state does not mean that the state has also to be the provider. You can have privately run train services, hospitals and prisons without greedy unionists leading them to bankruptcy.
Under such a system Greek politicians might even, some day, expect to be voted for their merits rather than as a reward for appointing voters by the thousands to state jobs.
Mark Dragoumis