Bankrupt Greece breaks promise, rehires 15,000 public employees

That’s equivalent to about 450,000 new public employees in the US.  Here’s the FT:

Opposition lawmakers accused Syriza of violating that agreement with the new laws, which could expand the government payroll by as many as 15,000 employees.

But government ministers remained defiant. “We aren’t going to consult [bailout monitors], we don’t have to, we’re a sovereign state,” Nikos Voutsis, the powerful interior minister, told parliament.

Yes, and other sovereign states “don’t have to” give Greece any more money.

The municipal police force, which was disbanded 18 months ago, will be revived and several thousand caretakers at state schools, known as “guards”, are to be rehired.

Kyriakos Mitsotakis, who “” as the previous government’s minister for administrative reform “” implemented past cuts, said Syriza’s legislation marked a return to the clientelist practices of the past.

“It’s not just the hirings, but a lack of transparency”‰.”‰.”‰.”‰and the reversal of new disciplinary procedures that had proved very effective,” Mr Mitsotakis said.

Nikos Pappas, minister of state with responsibility for the media, said the reopening of the state broadcaster would include the rehiring of 1,500 employees at a cost of €30m to be covered from the auction of television licenses.

When Antonis Samaras, the previous prime minister, closed ERT in a deeply unpopular move, he called it a “haven of wasteful spending.”

Imagine if the US hired another 45,000 “workers” for NPR at a time when the old and sick couldn’t get public health care at hospitals.  Perhaps those public school “guards” and state broadcaster “workers” will build some of that “infrastructure” that Greece needs.

I can’t wait to see how the left defends this move.

PS.  I relied on sources like the “World Socialist Web Site” for this post, in case you were wondering.



32 Responses to “Bankrupt Greece breaks promise, rehires 15,000 public employees”

  1. Gravatar of Ray Lopez Ray Lopez
    6. May 2015 at 20:00

    Sumner: ” I relied on sources like the “World Socialist Web Site” for this post, in case you were wondering” – no I’m not surprised, Mr. Closet Inflationist to Supposedly Help the Masses.

    And since when are you an expert in Greek politics? I am a citizen and live there and I don’t deign to speculate on crazy Greek politics. I guess you believe in “universal principles grounded in economics” which any competent historian and cross-disciplined social scientist will tell you is false. It’s this kind of “Rational Expectations Chicago School” logic that got us into trouble, with Robert Shiller being a notable and helpful counterweight, as well as some of the Austrians, including MF.

  2. Gravatar of Britonomist Britonomist
    6. May 2015 at 20:24


    Putting MF and Robert Shiller in the same sentence actually makes me physically ill (and I’m sure Robert Shiller would laugh hysterically and then become ill himself if you tried to give one of MF’s ‘arguments’ to him). I honestly don’t think I can even bring myself to look at the comments section anymore (for the record your extreme super-neutrality of money all relies on ultra-rational expectations models, you’re just a walking contradiction).

  3. Gravatar of simon simon
    6. May 2015 at 20:28

    The most important issue is whether Greece is still running a primary surplus like had been planned earlier. If they are, then they have the power – they can threaten to default. If they’re running a primary deficit though with these changes, then the potential bailout sources have the power, since a primary deficit is unsustainable without them.

  4. Gravatar of Brett Brett
    6. May 2015 at 21:11

    Sounds like they’re more amenable to Grexit, then – or at least so desperate that they’re willing to risk open defiance even if it means they’ll be drop-kicked.

    It’s about time, to be honest. They paid on the debts and maintained austerity for six years – if that isn’t a signal that the Greek government isn’t willing to pay their debts except in absolutely dire circumstances, then nothing is. It’ll be brutal for the next 1-2 years if they Grexit, followed by improvements due to massive currency devaluation.

  5. Gravatar of Brett Brett
    6. May 2015 at 21:12

    Sounds like they’re more amenable to Grexit, then – or at least so desperate that they’re willing to risk open defiance even if it means they’ll be drop-kicked.

    It’s about time, to be honest. They paid on the debts and maintained austerity for six years – if that isn’t a signal that the Greek government is willing to pay their debts except in absolutely dire circumstances, then nothing is. It’ll be brutal for the next 1-2 years if they Grexit, followed by improvements due to massive currency devaluation.

  6. Gravatar of Brett Brett
    6. May 2015 at 21:12

    Crap, double post. The first one has a typo that I changed.

  7. Gravatar of benjamin cole benjamin cole
    6. May 2015 at 22:26

    Grexit, renege on debts, Greece already running primary surplus (the US does not btw). Print drachmas to the moon.
    Yes, the Greeks have been, well, Southern Europeans. But egads 25% unemployment forever? A monetary noose from the ECB?

    Grexit and forget it.

  8. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    7. May 2015 at 00:09

    “Greece already running primary surplus”

    They ran a few primary surpluses in the past (today, they are probably back in deficit). This is only true, however, using the EU definition of “primary surplus” which excludes “extraordinary expenses” in addition to interest payments. The government would not be able to support itself from their tax income (which is what ‘primary surplus’ normally implies).

  9. Gravatar of Sean Sean
    7. May 2015 at 01:08

    Sorry, benjamin, but even Yanis Varoufakis (ys, the current Greek finance minister) claimed that the primary suplus was an accounting illusion per Luis’ explanation.

  10. Gravatar of Anand Anand
    7. May 2015 at 02:13

    Why “workers” in quotes? Is the work that people do in NPR not real work? Perhaps they should start teaching economics instead (just kidding). And what is wrong with reversing a very unpopular move which the previous govt. undertook, for which (among other things) it was soundly thrashed?

    I am also greatly puzzled by your reference to doing this while “people are not getting healthcare”. The article which you link mentions that people are not getting healthcare because…austerity forced deep cuts in public hospital budgets. And now the Greek govt. rehired some public workers back…and this is an argument against it how? I do not know the breakdown of the 15,000, but presumably it includes health workers and many other problems which Greek society is ailing from.

    Note that the allegations of “wasteful spending” come from the guy who cut the jobs in the first place. What did you expect him to say? “No, they were actually doing great work, I cut them anyway”? Also, Greece says that the cost for the rehiring would be paid for by the auction of television licenses.

  11. Gravatar of Major.Freedom Major.Freedom
    7. May 2015 at 03:00


    You are ill because you are unable to distinguish people from ideas. You are still smarting from the last go aren’t you.

    I will agree though that Shiller should not be grouped along with me, as he doesn’t understand economic calculation and cannot help but blame “animal spirits” for the business cycle. He thinks from a Keynesian perspective, which is riddled with fallacies.

  12. Gravatar of Major.Freedom Major.Freedom
    7. May 2015 at 03:35

    “I can’t wait to see how the left defends this move.”

    Perhaps because you can’t wait for them to use some of the reasons you yourself have for defending the various forms of state imposed destruction and waste, including central banking?

    How about this:

    “Both groups of people (current state employees and lawmakers, as well as the unemployed but still want to be paid with stolen money public workers) have agreed that unless more government “workers” are rehired, there will be another Hitler.”

    “We have agreed that due to a lack of monetary offset, a bunch of capricious and sloppy “spenders” on drugs, hookers, ouzo, and weapons will increase aggregate spending much more than the penny pinching money hoarders that plague Greek society.”

    “We’re not ideologues. We don’t pretend to give a rat’s ass about principles or moral codes that the single minded pathetic losers who want to elevate their clean hands over the heads of more practical and strategic thinkers, like us.”

    “What, so what you’re saying is that it is wrong to destroy other people’s lives for the sake of a higher cause and higher ideal? What are you? Some kind of anarchist?”

    “But you righties support statism, so we will just say that you agree with our fundamental approach, you just disagree with the specific tactics we are utilizing.”

    I could go on but the point is made.

    You want to hear for own rotten worldview repeated back to you, so that you can feel reassured that the destruction and exploitation you peddle, is what the main opponent is using. That is how the secrets of the truths in the cosmos are revealed to the high priests of social science.

  13. Gravatar of ssumner ssumner
    7. May 2015 at 04:54

    Anand, I can see you are not familiar with how things work in Greece. You need to be somebody’s cousin to get these jobs, and the work required is often trivial. I was commenting on the state broadcaster productivity in Greece, not at NPR (which seems to be a high quality organization, AFAIK.)

    How often do you think the “state” owned broadcaster will present neoliberal arguments? How often will then mentioned that Greece is the least neoliberal developed country in the entire world, and also the most screwed up? That Greece needs more capitalism?

    So you are claiming that they should be hiring lots of public broadcaster workers because the medical crisis discussed by Krugman and others has magically and suddenly gone away? Good, if Greece is that rich then no need for the Europeans to give more aid.

    You said:

    “Also, Greece says that the cost for the rehiring would be paid for by the auction of television licenses.”

    Money is fungible. And broke is broke.

  14. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    7. May 2015 at 06:52

    Anand: the argument is that this undermines the view that it was the “austerity” that caused the healthcare issues. If the Greek government claims it needs humanitarian aid, all the while spending money on government propaganda and the police force, then, well, it’s not really the lack of money that is causing the crisis but the bad priorities.

  15. Gravatar of Ray Lopez Ray Lopez
    7. May 2015 at 09:07

    @Britonomist – Schiller’s ‘animal spirits’, while taken from Keynes, is an apt way of summarizing how economics is nonlinear. In a nonlinear system you can have rational expectations (which lead to money neutrality) side-by-side with behavioral economics, and there’s no contradiction. Hence MF and Schiller can coexist. Sumner himself uses Rational Expectations when he deals with some subject matters; it’s just a tool, not necessarily a policy, unless you are die-hard Real Business Cycle theorist.

  16. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    7. May 2015 at 09:30

    ‘Why “workers” in quotes? Is the work that people do in NPR not real work?’

    The only way to find out is to offer the results of the effort to people who pay for it with their own money. If there are no takers, then it’s ‘work’ in the sarcastic sense only.

  17. Gravatar of Anand Anand
    7. May 2015 at 11:12


    I am quite sure you know more about Greece than I do. If one needs to have a influential cousin to get a job in state TV, doesn’t one also need to have an cousin to get sweet deals on privatization of state assets? I seem to recall something called “Russian privatization” where former communists or their cronies became very wealthy.

    My point was simple: if one assumes that austerity was responsible for the bad state of Greek public health, as the Lancet paper notes, then steps to reverse austerity could not be the problem. One can of course question priorities.

    You are saying unless the public health system is fixed, Greece should not add any public workers in any other sectors? I don’t think that’s the way any govt. works, no matter how enlightened, as opposed to the corrupt Greek govt. There are always many issues to consider, many priorities.

    Who gets to decide who to hire and where? Plainly the Greeks, who, as the piece noted, were against the laying off of the ERT workers. ERT’s closing and the manner in which it was done had a lot of symbolic value. See Varoufakis’s post here, for instance.

    If you say that “you can’t eat symbolism”, you will be right. But that is not the way human beings work. This was an election promise by Tsipras. God forbid anybody actually keep their election promises. They should of course follow the orders from Brussels.

    The rest of your comment is general. “State television” can air a fair range of views. It is not strictly comparable, of course, but wasn’t “Free to Choose” a PBS series? (Very well made, I should add. I watched both the old and new versions on the web. I liked the old one better. The discussion part was longer and more thorough.) And the BBC airs a fair range of views. I do not know how independent Greek state television is. Pretty much every European country has state TV. And is Greece closing down all private TV stations, ensuring that only govt. propaganda will be allowed on air?

    I agree that money is fungible.

    The claim of austerity affecting Greek public health was not made by Greek govt. The source of the claim was Lancet, a British medical journal.

  18. Gravatar of benjamin cole benjamin cole
    7. May 2015 at 12:30

    I am sorry to hear that Greece still does not have a balanced budget. However the problem with Greecee is a lack of demand increase. So Grexit, and then monetize tax revenues. After all Greece now has deflation and 25 percent unemployment.
    is the problem increase one of local government? Probably. The public sector is just as large in Denmark.
    Greece probably needs better government. It obviously needs a better monetary policy. Egads, leave the moralizing to the pinch-faced monetary ascetics.

  19. Gravatar of charlie charlie
    7. May 2015 at 14:30

    My interpretation of this and other recent antics is that Greece is no longer even pretending to cooperate, and is essentially daring the troika to do something about it.

    Surprisingly, this may actual work, considering the previous dithering and endless second chances they have been afforded.

  20. Gravatar of Prakash Prakash
    7. May 2015 at 21:25

    The ultimate question might end up being how the military reacts to being paid in guaranteed-to-diminish drachmas.

  21. Gravatar of Willy2 Willy2
    7. May 2015 at 22:53

    Greece is (one of) the most corrupt country/countries in Europe. If I were a truck driver in Greece then I must buy a license before I am allowed to buy a truck.

  22. Gravatar of ssumner ssumner
    8. May 2015 at 06:38

    Anand, I think you are missing the big picture here. Greece had and still has the most screwed up economic regime in the entire developed world. Now the Greek government wants to double down on that system, making Greece even more statist. And because that regime bankrupted Greece, and they can’t afford it, they want other countries to pay for their socialism.

    Again, they are free to do as they wish, as you say. Just don’t expect other countries to pay for it.

    You said:

    “And the BBC airs a fair range of views.”

    Yes, and anyone who watches Fox News knows that they also air a fair range of views. But no sensible person would deny that Fox is very right wing in overall tone, or that the BBC is left wing.

  23. Gravatar of Morgan Warstler Morgan Warstler
    8. May 2015 at 06:53

    Greece is leaving Euro.

  24. Gravatar of Jose Romeu Robazzi Jose Romeu Robazzi
    8. May 2015 at 19:43

    @Ben Cole
    Mr. Cole, I believe that following your recipe would alleviate things for a while, after all, Argentina did just that and for a couple of years things got better, but then, no real reforms were made, and the country is back to stagnation, anyone who has visited argentina can tell you that. But this is not my point, I have two questions for you: are you aware that the Greeks don’t want to leave the Eurozone, right? They voted for it, they want to stay. The second question is why isn’t an option to stay in the Euro, go bankrupt somehow (again), do your reforms by achieving a certain primary surplus, and get on with life ? Would you have recommended that Detroit leave the US, renege its debts, and start printing Detroitians as currency back in 2013? Because that is what you are suggesting …

  25. Gravatar of Anand Anand
    9. May 2015 at 00:53

    I might of course be missing the big picture.

    The point is that the “structural reforms” in the last five or so years in Greece have not borne much fruit. For instance, see this: After a massive dose of pain, export growth has been flat and imports have collapsed due to the collapsing economy (Graph 2). The paper says, well, it turns out there are even more distortions in Greek economy, have to address that. Well, ok.

    The Greeks are asking: is this really the way to go? Massive pain on top of the collapsing economy (which probably makes things worse: perhaps you would agree that in the absence of monetary easing by the ECB, the fiscal austerity would not be offset). Perhaps let’s get the economy stabilized again, and then think about these structural reforms.

    The comments on the BBC are/were a bit off-topic, but suffice to say, I do not think the BBC is left-wing in the same way that Fox is right-wing. Does anyone think the BBC gives as much coverage to the Greens, as Fox does the Tea Party? Anyway, that is too far aside for me to pursue here.

  26. Gravatar of Anand Anand
    9. May 2015 at 00:57

    (Previous comment: “export growth” replaced by “exports”)

  27. Gravatar of ssumner ssumner
    9. May 2015 at 06:52

    Anand, You said:

    “I do not think the BBC is left-wing in the same way that Fox is right-wing.”

    I never said it was.

    Greece has don’t relatively little structural reform, if it had done a lot it would be doing far better.

    Yes, a huge dose of fiscal stimulus could boost growth in the short run, but there’s no point in even discussing that option because Greece in broke.

    The Greek public repeatedly elected corrupt politicians who ruined the Greek economy. There’s not much to say other than “that’s too bad.” I wish they had made better choices, but it is what it is. The world is full of different types of countries, some better off than Greece, most far worse off.

  28. Gravatar of Anand Anand
    9. May 2015 at 08:37

    About fiscal stimulus. Sure, there isn’t going to be a huge fiscal stimulus, but surely if Greece had 1% primary surplus instead of 4.5% primary surplus, it would help?

    Perhaps Greece should have done more structural reforms. It did a fair bit, especially in the area of fiscal consolidation and labour market reforms. See this IMF Article IV consultation from 2013.

    It says Greece should have done even more. Maybe, but again, after one of “deepest peacetime recessions in industrialized economies” (again from the IMF report), many Greeks are skeptical that is the way to go. As Varoufakis says, if Greeks could see that there is some light at the end of this tunnel, they could understand the need for more sacrificing.

    I must have misunderstood your point about the BBC, but that is not too important for this issue.

  29. Gravatar of Anand Anand
    9. May 2015 at 08:43

    Replace primary surplus numbers by 3 and 1.5, I think those are the numbers Syriza wants.

  30. Gravatar of ssumner ssumner
    10. May 2015 at 06:52

    Anand, Again, free markets are not “sacrifice,” they are the best policy, period. The fact that the Greeks regard these policies as “sacrifice” tells you all you need to know about why Switzerland is rich and Greece is poor.

  31. Gravatar of Becky Hargrove Becky Hargrove
    12. May 2015 at 06:54

    35,000 Greek doctors have emigrated to Germany? Now that’s a heck of a trade…

  32. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    30. June 2015 at 03:06

    Just read a Portuguese European parliament member from the centre left describe Syriza s negotiation stance as one of “constructive criticism”.

Leave a Reply