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Greece Will Tell Troika: No Public Firings

public sectorInspectors from Greece’s international lenders who returned to Athens on March 3 to assess progress on reforms to meet fiscal targets are going to be told that the government will not begin firing of public workers as ordered because it believes it has already met goals through retirements.
The envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) will meet a defensive government which is trying to balance demands to cut public sector jobs against the political and social unrest that would incur.
In its sixth year of recession, Greece has agreed to shrink its public sector by 150,000 by 2015 to cut its wage bill, mainly through attrition: hiring one new person for every 10 who retire. The uneasy coalition government overseen by New Democracy leader and Prime Minister Antonis Samaras is frantic to avoid firing public workers although austerity measures it imposed on Troika orders has created a record 27 percent unemployment rate int he private sector.
The government was supposed to transfer 25,000 employees to a so-called mobility scheme by the end of this year, where workers will earn reduced pay for a year and may face layoffs or firings if new jobs can’t be found for them. Finance Minister Stournaras played down talk of imminent job cuts in comments to Sunday’s To Vima newspaper: “The public sector has shrunk by 75,000 people in the last one and a half years, there will be no layoffs,” he was quoted as saying.
Greece’s crushing economic crisis was caused in large part by New Democracy and the PASOK Socialists, one of its coalition members, packing public payrolls with hundreds of thousands of needless workers for generations in return for votes so they could stay in power, and both parties are seen as eager to avoid alienating their voter base by firing them.
The inspectors were to meet Stournaras to review progress on privatizations, tax administration reforms, bank recapitalization and steps to shrink the public sector. The Troika unlocked a first round of $69 billion in new loans in December as part of a second bailout of $325 billion after Samaras’ government rammed through $13.5 billion in more spending cuts, tax hikes and slashed pensions.
International lenders unlocked aid in December after Greece’s coalition government adopted austerity measures to bring the bailout plan back on track, with Athens aiming for a primary budget surplus this year for the first time since 2002. If the fiscal goals aren’t met, Samaras could be forced to break another promise, this one to not impose more pay cuts, tax hikes and slashed pensions.
Greece’s Eurozone partners and the IMF have urged strict adherence to the plan to shore up public finances, a line echoed by the head of the Euro Working Group of senior officials who prepare decisions of euro zone finance ministers. “All that was agreed in the bailout plan must be implemented. These reforms were agreed to make the Greek economy stronger, flexible and more competitive,” Euro Working Group chief Thomas Wieser told Greek newspaper Realnews.
Bank recapitaliszation will be another topic on the agenda. Bankers have asked for an extension to an end-April deadline to wrap up a scheme to restore the solvency of the country’s four biggest lenders but that is meeting strong resistance from some Eurozone countries. Inspectors will also review steps taken to address shortcomings in tax collection and fighting tax evasion, and long-delaying privatizations.

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