Greece Hides 10% Of Workforce On Secret State Payroll

The reports coming from Greece as she tries to come to terms with her economy do raise a smile.  The IMF and the EU are encouraged by the 45% cuts in spending by central government, but the problem is that central government has little idea what goes on in local government.  No one in Greece has any idea, for example, how many state employees there are, and the government has authorised that a count take place.

Officially there are 700,000 out of a working population of 4.5 million.  But since the count started, another 50,000 have been ‘discovered ‘ so far.  It is estimated that there could be over 1,000,000 in total to be ‘found’!
WSJ –
Nikos Magginas, a senior economist at the National Bank of Greece, said- 


“As far as the central-government budget is concerned, the government is on target. But in the broader public sector there are a lot of gray zones and the troika will try to figure out where the hemorrhages are.”



Specifically, the focus of the mission will be big deficits in the country’s national health-care system and public hospitals, as well as spending by municipalities and local governments. Many of Greece’s local governments have operated with deficits for years, and analysts fear their spending may rise further ahead of local elections set for October.
There are also concerns about Greece’s deficit-ridden pension funds, some of which already have spent all, or close to all, of their allotted outlays for the year and will require transfers from the central government.
In a sign that Greece’s government is still struggling to get a handle on the country’s massive public sector, Athens last week announced it was extending a two-week survey aimed at counting public-sector employees. The census, which began in early this month, will now run until July 29, according to government officials, and has so far registered some 747,000 employees on government payrolls.


No one knows the exact number of public-sector workers in Greece. Until recently, finance-ministry officials estimated the entire public-sector work force, including central-government employees, local government employees and workers in state-owned companies, at around 700,000. But other estimates range as high as 1 million or more. Greece has a total labor force of about 4.5 million workers.

I bet the Germans will be pleased when they hear all this.  If they can hide up to 500,000 workers, I wouldn’t doubt they could hide a few billions of debt here and there as well, either in banks or in local authorities.

See  http://the-tap.blogspot.com/2010/07/greek-10-year-bond-rates-soar.html

SEE Ambrose Pritchard Evans who points out that the stress test assumptions are based on fantasy, with property prices rising, despite collapsing credit.

Extract –

As analysts sift through the wealth of new detail from the tests, they are baffled by the chaotic criteria.






“We have a ludicrous worst-case scenario that Greek house prices fall by 2pc in 2011: when you first read it you think their must be a typo,” said David Owen from Jefferies Fixed Income.

Austria’s worst-case is a 2.7pc rise in house prices, or zero for Poland, and -2pc for Italy. Mr Owen said these assumptions would be demolished by a serious recession. Yet the tests assume that all eurozone states would contract at the same rate in a downturn. In reality, Club Med states and Ireland would almost certainly fare worse since they are already coping with the triple effects of debt-deleveraging, lost competitiveness, and fiscal tightening.
Markets are not reading the small print, just enjoying the rise in prices, no doubt nudged along by a little intervention here and there, while the EU rushes to grab any new members it can lay its hands on, before the real crisis hits home.  With credit collapsing, property prices are falling and banks’ liabilities becoming exposed.  The process of bank insolvency has hardly started.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7911318/Spain-shines-on-stress-test-Germany-flunks.html

http://eureferendum.blogspot.com/2010/07/greeks-baring-rifts.html

The Tap Blog is a collective of like-minded researchers and writers who’ve joined forces to distribute information and voice opinions avoided by the world’s media.
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