Analysis of the Greek public sector expenditures AFTER the bankruptcy of 2011

The following data were made public by the Greek government regarding its annual expenditures for the years 2011 (the year of the PSI bankruptcy) and 2012:



Translation from Greek follows:
2011 total public sector expenditures 105,5 billion euros.
- Public sector employees' wages 19.6 bln (18.6% of total).
- Pensions 31.6 bln.
- Social benefits 14.5 bln.
- Operational costs 12.4 bln.
- Public sector investments 7.4 bls.
- EU returns 2.3 bls.
- Paid interest of previous loans 15.9 bls.
- Other (?) 1.9 bls.


2012 total public sector expenditures 100,2 billion euros.
- Public sector employees' wages 17.9 bln (18.0% of total).
- Pensions 31.2 bln.
- Social benefits 14.1 bln.
- Operational costs 10.9 bln.
- Public sector investments 7.9 bls.
- EU returns 2.3 bls.
- Paid interest of previous loans 12.8 bls.
- Other (?) 2.9 bls.

Very interesting conclusions are drawn from the comparison of the expenditures in 2011 and 2012:

- the total public sector expenditures are reduced ONLY by 5%. It has to be noted that the greek public sector defaulted on its debts in 2011 because it had no means (as they said) to pay the money it owed to its private sector lenders such as banks, pension funds, and thousands of people who bought the "safe" and with small interest greek public sector bonds! However we see that the public sector HAD money to pay its over the top expenditures, and while it robbed private parties of 120 BILLION euros (in defaulted bonds) it only reduced its spending by a mere 5%!

- the reduction of public sector wages was only 8.67%. If we divide the spending for wages by the number of the public sector employees (less than 700000 "officially") we find that the AVERAGE annual pay for a public sector employee is 26000 euros! Mind that we are talking about a public sector that went bankrupt and did not pay its debts to the bond holders who were ruined.

- the new government elected last August made a new tax plan for 2013. According to the new taxation, public sector employees who make up to 26000 euros per year (what a coincidence!) will pay LESS tax in 2013 than in 2012. This directly equals to a pay raise.

- Social benefits are left virtually untouched. The way social benefits are given in Greece creates an environment for large scale corruption. The public "servants" in collaboration with the beneficiaries steal money and even if they are caught there is virtually no punishment. The public servant remains at his post and continues to be paid as usual and the conman who was receiving the benefit just loses the benefit. No legal action is taken to reclaim the stolen money. No responsibility is sought on behalf of the public sector. Noone loses his/her job!

- the greatest reduction in spending comes from the reduced loan interests due to the PSI which is around 3 (of the total 5) bls! In conclusion we see clearly that even this minimal reduction in spending (5%) comes not from the public sector operational cost reduction but it is just logistic due to the reduced interests!

- Interestingly enough there is also a significant rise in spending in the mysterious category "Other" which is a whole billion euros.