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Reforming Greece's State Sector: New Face Takes on Old Problem

Greece's Administrative Reform Minister Kyriakos Mitsotakis speaks during an interview with Reuters in Athens, July 31, 2013.
Greece's Administrative Reform Minister Kyriakos Mitsotakis speaks during an interview with Reuters in Athens, July 31, 2013.
As political jobs go, Greece's new reforms minister has one of the toughest: firing thousands of workers within months from a public sector that seems immune to change.

But Kyriakos Mitsotakis, an ex-banker and son of a former prime minister, says his ambitions go beyond fulfilling numerical targets set under Greece's international bailout deal to keep funds flowing from the European Union and IMF.

Reform, he says, is also about making Greek public employees accept what is standard practice elsewhere in the world - like  working the hours they are paid for, or losing their salary if they go to jail.

“We did obvious things like send the auditors to check on whether people showed up on time,” said the 45-year-old former Chase investment bank analyst and McKinsey consultant.

“We are sending a signal for the first time that we are going to check. Obviously we cannot check everyone, but you know we are sending a message that some things are changing,” he told Reuters at his Athens office which looks out on the Acropolis.

At his own ministry, the audit showed that 20 out of 400 employees had enjoyed the equivalent of a day off in a month by arriving late or cutting corners here and there, he said.

Greece's bureaucracy and the low-level corruption it breeds is another pet hate: Mitsotakis pointed to a document he had signed that morning bearing a row of boxes with signatures.

“I sign personally for every transfer of every Greek civil servant, from one unit to another” he said. “Before me there are between 14 to 16 different signatures for one transfer. That is not an acceptable process.”

Some see this as a now-or-never opportunity for overdue change. Long a critic of trade union practices and state waste, Mitsotakis is clearly bent on reform, but whether he can succeed where others before him have failed remains to be seen.

Greece has repeatedly stalled on reforming a state apparatus beset by corruption and hiring based on personal patronage;  foreign lenders have warned that the billions of euros in aid payments cannot continue without change.

Cases abound of convicted public employees still drawing their salaries when they're in jail, partly due to lengthy legal appeals and partly because nobody bothered to stop their pay.

Analysts say deep resistance from vested interests, tight deadlines and skepticism about new ministers from established political families - Constantine Mitsotakis was prime minister in the early 1990s - are all factors working against him.

“His family name, the fact that he is inexperienced as a minister and has the toughest task in the country are just a few of the hurdles,” said a political analyst who declined to be named.

Mitsotakis in turn said he was confident because the coalition government is committed to a reform drive that has more public support than many people realize. “I wouldn't accept this job if I thought that I couldn't do it,” he said.

Opinion polls show Greeks are divided over public sector redundancies. Some strikes have been disruptive but recent protests have been smaller than rallies of previous years. These had drawn crowds of more than 50,000 when parliament voted through austerity cuts demanded by the EU and IMF in return for rescue loans as Greece headed for near-bankruptcy.

Facing skepticism

Mitsotakis is blunt about why Greece has ended up where it is, and why it has struggled to change.

“In the past, the Greek political system viewed the state primarily not as the provider of services but as an instrument to remain in power. So, the whole logic of clientelistic and patronage politics, in my mind, is at the core of why the country went bankrupt in the first place,” he said.

“And now I think it is widely understood that this system can no longer be maintained.”

Meeting Greece's obligations to lenders on its 713,000-strong state sector is proving a big enough challenge.

When Mitsotakis was appointed minister for administrative reform in June, Greece had not put a single public sector employee into a transfer scheme, where workers are redeployed or fired. That compares with a mid-year target of 12,500.

Mitsotakis owes his job to a Cabinet reshuffle made after Prime Minister Antonis Samaras tried to meet a layoffs target by firing state broadcaster ERT's entire workforce of 2,600. That provoked a fierce backlash and prompted a junior coalition partner to quit the government.

Since then, he has looked past strikes and noisy protests staged by municipal policemen and teachers to identify more than 7,000 workers for the “mobility scheme”.

“The mobility and exit logic will relate to people who got into the public sector from the back door - not through the front door,” he said, expressing optimism that he can meet targets for the rest of the year.

According to ministry data, about 204 state workers have already been suspended or fired for violating the law. About 1,900 disciplinary cases were under investigation in June.

After spending part of his childhood in Paris, where his father was in exile during Greece's military dictatorship, Mitsotakis studied at Harvard and Stanford universities in the United States before going into the financial world. He gave up that career a decade ago to switch to politics.

Eyebrows were raised when Samaras named him reforms minister because Samaras brought down a government led by Mitsotakis Senior in 1993. Mitsotakis laughs off any suggestion of family animosity with Samaras, saying: “We have a very, very good working relationship.”

However, he acknowledges a family name as prominent as his has its drawbacks at a time of crisis.

“There is huge anti-establishment sentiment in Greece right now, so you have to prove every day what you do,” he said. “I understand this skepticism - I expect [someone like that] to work twice as hard to prove that he or she is actually worth it. And that's actually what people expect from me.”

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Comment Sorting
by: MKS from: NY
August 01, 2013 5:59 PM
Yeah, a relatively new face with an old name and a member of the old party that was the root of the old problem. If you believe the very same parties that are now governing Greece and are responsible for the corruption will clear that corruption by sacrificing low level employees, I have a bridge to nowhere to sell you.

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