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Eighteen months after the adoption of power, PASOK has proven that it lacks the courage to implement the measures for ending the crisis which has led the country to the most critical period of its modern history. This is the general opinion of local and international economic analysts who are united around the notion that the present government is strong in giving promises, but weak in their keeping. On the eve of yet another visit by the supervisory Troika of the IMF, the European Central Bank and the European Commission the Ministry of Labour and Social Security presented the plan for fiscal consolidation.

The ambitions of the government are that the labour market reforms and the tightening of the social security funds would save around 6.5 billion euros for the period 2012-2015. So far, one of the major problems in the budget recovery are the gaps in the health insurance and pension funds, which have proved to have a deficit of 2.6 billion euros for the first quarter of 2011.
 
At the same time, keeping the costs of state enterprises as the state railways, the urban transport and other companies continues. They cost billions euros per year and their restructuring is delayed dramatically. The railways had to be driven into the privatisation track by March 2011. Instead of producing approximately one million euros monthly deficit they had to balance the costs to the level of revenues. Weak to oppose the trade unions, however, the ministers of the Prime Minister George Papandreou left the plans on paper. An example is that the zeroing of the OSE deficit remained for September instead of being made in March this year, as envisaged in the Memorandum for financial support from the spring of 2010.

And while the implementation of the current plans to return the solvency of public enterprises are being postponed the government comes out with new ambitions to reduce the illegal employment in the country almost by half. According to the information submitted to GRReporter, the next three years the Ministry of Labour would reduce the illegal employment from 26% to 16%. Currently, one in every four workers in Greece is not insured and does not pay income tax.

The idea is about 480,000 citizens, who are officially unemployed today but in fact work illegally without social and pension insurance, to become legal workers. This plan resembles more a science fiction novel but it is one of the measures through which the government hopes to increase the revenue to the needy social insurance funds.

The Ministry of Labour and Social Security wants to collect at least three billion euros more in revenues by 2015. A senior official of the Ministry of Labour and Social Security said especially for GRReporter that the utilization of the property of social security funds would support the revenue flows in the next three years. They are "rich" in terms of buildings and other unused assets that would be offered for rent, consignment or privatised. According to our source, this would support the budget revenue with at least 600 million euros beyond the privatisation program worth 50 billion euros and announced by the Troika at the beginning of the year. Nevertheless, the biggest burden would remain on increasing the revenues from social security contributions in times of recession when unemployment rises, the labour market shrinks and the general policy is to develop more flexible employment and lower wages.

The 2010 data show that the average reduction in wages in the private and public sectors reached a total of 9.3%. When adding the average percentage of the negative economic growth, it turns that the real incomes in economy are reduced by around 15% and the prospects for 2011 are that they would fall further by an average 5.8% by year's end. So, here remains the false impression that the competitiveness of the country increases due to lower labour costs, but the actual measures taken so far have no positive effect on production except to reduce the purchasing power of people. This conclusion is confirmed by the National Statistics Institute data which were published today and show a decrease of 8% in the production power of Greece in March 2011.

As for the expenditure in the fiscal consolidation, the Ministry plans to cut an additional 3.5 billion euros approximately. One of the main sources for the cuts is the lists of drugs subsidised by the state. Then come the well-known restructuring of the social security funds and the merger of institutions within the system in order to reduce the operating expenditures. The Ministry calls the practice activity optimization, but it actually means serious cuts. Economic analysts, however, fear that this "optimization" could be quite insufficient to raise three billion euros in three years. Moreover, the actions taken by the government so far are not convincing that the next recovery program could be implemented as planned.