Government’s decision to shut ERT is a necessary evil 

Financial Times Editorial

The decision by Antonis Samaras, prime minister, to switch off ERT, the national broadcaster, produced knee-jerk reactions both in Greece and abroad. The unions called a general strike on Thursday. Leaders of the coalition partners to Mr Samaras’ New Democracy voiced their dissent. The European Commission was also critical.

True, the prime minister went ahead with his move in spectacular fashion. He bypassed parliament, using a fast-track legal procedure. But claims that Mr Samaras is clamping down on critical voices are off the mark. The decision was made on financial grounds. A new, slimmer broadcaster is expected to open at the end of the summer. 

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ERT’s inefficiency is a prime example of what has gone wrong with the public sector in Greece. Decades of politically driven appointments bloated the size of the broadcaster’s payroll, doing nothing to improve the quality of its programmes. Workers were hard to fire because of excessive protection. Unions dragged their feet over a restructuring plan, leaving the government no option but to shut the old broadcaster.

Since the elections last year, the administration has done much to clean up Greece’s fiscal house and to pass structural reforms, including a shake-up of the labour market. In spite of a slow start, it has begun to crack down on endemic tax evasion. Yet reform of the public sector is one of the areas in which Mr Samaras and his colleagues have done the least. The troika of international lenders expects 4,000 jobs to go by the end of the year. Before this week’s decision to close down ERT, the cabinet had offered little detail of where the axe would fall.

Job cuts today are not only needed to help the government’s finances. They are a precondition for the public sector to hire again tomorrow. This process will benefit those workers – typically the young – who were denied jobs by more powerful insiders. It will also boost the economy, as the skills of the new hires will be more relevant for today’s world.

With the economy expected to shrink by a further 4 per cent in 2013, however, hopes for a recovery have faded. This matters for Greece, but also for the international lenders, who had hoped that the second rescue package, approved in 2012, would be the last. The troika is right to demand that Mr Samaras deliver on what he has promised. But as the national debt shows no sign of falling, lenders should be prepared for a bumpy road ahead.