The figures I gave were in-line with the US (as that's what most of this audience understands), but if you scale everything by a certain factor, the entire principle holds basically anywhere.

Not really. US programming salaries are much higher than most other engineering and specialist positions, which makes it harder for the government to hire good programmers.

However, programming salaries here in the EU are much more in line with other specialist salaries, which the government already hires many of. So there is no significant problem in hiring programmers at competitive rates for government work. The bigger problem, and the reason this doesn't usually happen, is just ideological opposition to state services, preferring to contract out this type of work instead of building IT infrastructure in-house.