Europe's shrinking public sector - by Gavin Hewitt

It has been another bad week for Europe's public sector. Portugal announced it would cut civil servants' wages by 5%.

The Republic of Ireland has put a figure on the giant black hole in its banking sector and the public sector unions know that further cuts are on the way, when the budget is delivered in December. The Irish Finance Minister, Brian Lenihan, did not pull his punches: "a fundamental reappraisal of the public sector will have to take place".

In the UK unions are holding their breath for the spending review on 20 October.
Most of the cuts are not made from conviction that a smaller public sector would be beneficial; they are driven by necessity, the necessity to reduce budget deficits. Some like the Tea Party in the United States argue for smaller government. You don't hear much of that in Europe.

Note EU-Digest: the new Dutch government which is in its final stages of formation announced it would be cutting approximately 20% of the Dutch civil service force.



For more: BBC - Gavin Hewitt's Europe: Europe's shrinking public sector