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Prime Minister Antonis Samaras and his partners in the coalition government are expected to take the final decision on wage cuts in power and other ministries in order to achieve the goal of reducing spending to 11.7 billion euro. The relevant ministers failed to agree on the size of reduction with the financial team, which resulted in violent disputes between representatives of the ministries. The ministers themselves made warnings about the political consequences of excessive wage cuts.

The intergovernmental conflict began last week when Deputy Minister of Finance Christos Staikouras and General Secretary Christina Papakonstantinou informed the ministries of defence, public order and citizen protection, justice and education that they need to cut the salaries included in the so-called special payroll tables by an average of 12.4 per cent. Moreover, the reductions should take effect retrospectively from 1 July 2012.

The changes will affect around 200,000 people, in particular:

- The entire staff of armed forces and security forces

- Priests and senior clergy

- Teachers in high schools and colleges as well as the staff in research centres

- Diplomatic officials and court judges

- Doctors in the national health system
 
None of these categories of civil servants is ready to accept a new reduction of salaries after the cuts of up 20 to 35 per cent already made. Trade union bodies have already started pushing the ministers and warned that massive protests would begin. The ministries, in turn, began sending the Ministry of Finance lists of already made cuts in costs to avoid salary reductions.

In an attempt to show that members of the navy cannot accept a new decrease of their salaries, Minister of Defence Panos Panagiotopoulos noted that benefits and costs to the amount of 2.15 billion euro have already been cut.

Similarly, the Minister of Public Order Nikos Dendias told the Deputy Minister of Finance that he has already reduced the cost of bonuses and overtime of the police. He stressed that this amounted to 11 per cent of the costs and therefore, he could not require further reduction to the amount of 12 per cent.

The headquarters of the Ministry of Finance indicated that the reduction of costs to which the ministers referred has been included in the programme to save 11.7 billion euro. Nevertheless, it was necessary to save another 2 billion euro that could be obtained only through cutting salary costs.

According to senior government officials, the decision taken will be "somewhere in between". This means that firm ministers will tend to make some cuts and the Ministry of Finance will not require large reductions of the already cut incomes of employees.

The final decision is expected to be adopted in about 15 days but before that, the government would seek the opinion of the supervisory Troika on this issue. It appears, however, that the reductions will take place as follows:

- The reduction of the salaries of members of the military and security forces would not be more than 5 per cent, especially for those, who are engaged in operational activities and are not behind office desks. However, because the distinction between the two categories is not an easy task, a general reduction of between 4-5 per cent will probably be introduced retrospectively from 1 January this year.

- The average reduction of the salaries of university teachers and researchers will be between 10 and 12 per cent. It has been already decided not to cut the salaries of priests, as they are low anyway. At the same time, the income of the higher clergy will be cut by about 20 per cent. For example, the salary of a bishop, which is now 2,250 euro, will drop to 1,900 euro. The reduction of the salaries of teachers in higher education and colleges will be in the same range and slightly lower for the research staff. Along with it, it will be announced that teachers in primary and secondary schools will be included in the general payroll table for civil servants from January 1 2014 onwards.

- The reduction of the salaries of doctors working in the national health system will not exceed 8 per cent to avoid protest responses that would block the normal functioning of hospitals.

- To achieve the goal of cutting costs by 2 billion euro, the Ministry of Finance will take the total lacking amount from the salaries of judges and diplomats. The cut in their salaries is expected to be the largest, reaching up to 20 per cent, as they have other benefits that the cuts in government spending made so far have not affected.

For comparison, the initial salary of a doctor in the national health system is 1,027 euro, of a deputy head of department – 1,468 euro, of a head of department – 1,759 euro and of a hospital director - 2,054 euro.

The net salary of a newly appointed judge is 1,800 euro and the monthly income of a court of first instance judge with six years of service does not exceed 2,400 euro.

The basic salary in police is 683 euro. Along with the benefits and after statutory deductions, it becomes 690 euro per month. The basic gross salary of a lieutenant in the army and of the relevant levels of the other two categories is 899 euro.

At the same time, the government is expected to take strong action against the management of state-owned enterprises, which did not reduce the salaries by 35 per cent after the measure had been voted last year. Under the new law, after including the employees in the general payroll table, they should have put a ceiling on salaries amounting to 1,900 euro.