However, the governments are playing with the idea of not keeping public salaries with inflation.
Well, it's a good thing (in the US at least) that the government can't dictate what private companies can pay their workers--and I agree, if the government decides to cut costs by lowering wages of their employees, there will likely be a flight to the private sector. That almost makes me smile, because that's what they've brought upon themselves with their reckless economic policies. On the other hand:
As a result, I forecast that public services are going to deteriorate.
This wouldn't be a good thing at all, but I don't see how those services wouldn't deteriorate if the federal government has to start slashing costs and cutting salaries. Let's hope they start with the military first (and no disrespect to our troops, but I think we can afford to defund at least some of the military branches).