The first talks with the IMF brought tension in the government: the Fund is requesting expense cuts worth around 2bn euros (1.7% of GDP), namely the exact savings that would be generated if the entire state apparatus slashed its wage costs by 20%, either by cutting wages or the number of public sector employees. On the other hand, the government is now counting government agencies and state employees. In line with ZF calculations, there are 244 government agencies/institutes/authorities/centres subordinated to the Prime Minister and his 19 ministers. The number of employees or the wage costs of each of them is not known as these data are not specified on the websites. The Transport Ministry, with 37 agencies, authorities or companies, the Education Ministry, with 24 agencies, and the Prime Minister with 22 agencies, are in fact mini-governments deciding budgets and wages as they see fit. The budgetary gap, likely to climb to 7% of GDP, can no longer be kept under control in the absence of expenditure cuts, but the Fund does not want to get involved in what it considers to be “political decisions”.

Subiecte #IMF#Savings