Discussions between Greek officials and envoys of international lenders bogged down after the government was reluctant to press for public sector layoffs and over differences in a debt-relief plan for Greeks who can’t pay their bills because of harsh austerity measures.
Greek media and the Wall Street Journal also reported that there were setbacksĀ over technical issues concerning unpaid government bills, delaying Prime Minister Antonis Samaras’ hopes for a swift settlement so that a 2.8 billion euros ($3.63 billion) loan installment due this month could be released.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is putting up $325 billion in two bailouts to rescue the Greek economy, is pressing for the first firings of 25,000 public workers from a hugely-bloated sector filled with hundreds of thousands of needless workers for generations.
“Our desire, and theirs too, is that over the next two days we will speed up the process and start to close chapters,” a senior finance ministry official told the Journal following a meeting with Troika officials on March 20. “We did not close anything today. The talks continue.” The government is reluctant to fire public workers, fearing it could off more social unrest.
While the talks were going on, some 1,000 people marched to Syntagma Square in the center of Athens protesting more coming pay cuts, tax hikes and slashed pensions and hoping to re-start the so-called Indignants Movement that occupied the area in front of Parliament for weeks in 2011. They were driven back by riot police firing tear gas.
The public-sector restructuring issue has become a test of wills between the Troika and successive Greek governments. Under the terms of the latest bailout agreement, Greece has agreed to place some 25,000 public workers this year in a labor reserve pool. There they will be paid 75% of their wages until they are transferred to another position. If another job isn’t found within a year, they will be fired.
The plan is part of a broader commitment by Greece to reduce its public work force by at least 150,000 workers by the end 2015. Greece is on track to meet that target through attrition but, in a country where the security of a government job has long been considered sacred, the government has yet to actively sack anyone while austerity has created 26.4 percent unemployment in the private sector.
A previous labor-reserve plan in 2011 largely failed; this time around, the government missed its end-of-February target to present a detailed staffing plan to the Troika and Finance Minister Yiannis Stournaras said he doesn’t want anyone to be fired.
“What the Troika wants to be sure about is whether the government is willing to start managing the public sector,” Panagiotis Petrakis, an economics professor at the University of Athens told the Journal. “After all, the shrinkage of the public sector by itself is not helping it become better.”
The issue has caused some dissension in the coalition government headed by Samaras, the New Democracy Conservative leader, with his partners, the PASOK Socialists and Democratic Left (DIMAR) uneasy with the idea of firing workers who are their core constituency. Political analysts say Prime Minister Antonis Samaras is considering a cabinet shake-up in the near future, with an aim to replacing underperforming ministers. There is widespread speculation that Public Administration Minister Antonis Manitakis, ratified by DIMAR and a critic of Samaras’ tough stance, likely to be fired.
According to Interior Ministry officials, 1,892 public workers have so far been placed in the labor reserve and will be moved to new positions by the end of the year. Another 12,500 positions will be identified by the middle of the year, as required under the bailout, and another 892 public workers have been placed on administrative leave after being charged with offenses that constitute a dereliction of duty.
The ministry is also hoping to sort through cases of another 7,000 public workers who could be placed on administrative leave due to past violationsāsome for alleged felony offenses. A review of those cases has been stalled for months amid a resistance in the Greek bureaucracy to convene the disciplinary councils needed to adjudicate those cases.
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