Greece: Still the Front Half of the Fiscal Pantomime Horse

| About: NATL BK (NBGGY)

The latest headline from Greece is "Greek Public Sector Union Calls One-Day Strike on Feb 10 to Protest Against Austerity Measures". It sounds like turkeys voting for Christmas and drove spreads on Greek debt up again. I have written before about how Greece may be a lead indicator for what happens in the host of other countries running unsustainable fiscal policies, and here is a great example.

As it becomes clear that public spending needs to be drastically curtailed there will be an increasing focus on the privileged status enjoyed by public sector workers over their private sector counterparts. As well as enviable job security public sector workers in many countries enjoy superior benefits too. The down side of working in the public sector used to be that compensation was generally lower, but this has been eroded in recent years as private sector wages have stagnated.

So as we move towards retraining public spending the burden will start to fall on this cosseted class of employees. Their reaction is predictable. Even in the midst of a clear crisis Greek public workers take the only course of action open to a group of people with no market value. Where Greece leads, many other countries will follow in the years to come.

Disclosure: None relevant