After weeks of arduous negotiations over long-delayed reforms, Greece and its international lenders neared agreement on most major issues, although it’s still uncertain how the government will reduce the workforce.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) wants 25,000 workers fired this year and 150,000 in total to be ejected over the next three years from a hugely bloated public sector.
There was no word about other points of discussion, such as speeding the pace of privatization, recapitalization of the country’s banks and whether to give Greeks who can’t afford to pay big tax hikes while they’re taking big pay cuts more time to meet their debts to the state.
German Finance Minister Wolfgang Schaeuble, a hardliner on austerity measures, threw monkey wrench into the works though when he said from a meeting of Eurozone finance ministers in Dublin that Greece hadn’t yet met all the requirements for disbursement of two pending installments totaling 10 billion euros ($13 billion).
The government of Prime Minister Antonis Samaras, the New Democracy Conservative leader, fears political fallout from workers and labor unions and has been hemming and hawing about how to proceed, favoring a hiring freeze, attrition and letting go of disciplinary problem workers.
Samaras said in an interview with the Greek financial newspaper Imerisia that the government could reduce staff by scrapping job positions. “There is no doubt we need a smaller but also better public sector,” Samaras said. “The constitution doesn’t ban the dismissal of state workers whose position has been scrapped.”
However, Fotis Kouvelis, head of one of Samaras’ coalition partners, the tiny Democratic Left (DIMAR) has insisted that every worker targeted for a breach of oath, including faking credentials, not showing up for work, committing felonies or other major offenses still can’t be fired until every single one has an individual hearing, which could take an undetermined amount of time. Cases in Greece typically take years to resolve.
Also involved in the meeting were PASOK Socialist leader Evangelos Venizelos, the government’s other partner, and Administrative Reform Minister Antonis Manitakis, in charge of finding a scheme to shed workers.
Statements by Venizelos after the meeting indicated that the government had broadly agreed on how to proceed with cutbacks in the state sector, with 4,000 departures expected by the end of the year. Kouvelis said that the government “will not cut jobs indiscriminately.”
The DIMAR leader opposed layoffs, calling instead for employees to enter a so-called mobility scheme. Manitakis has been seeking ways to speed up the disciplinary proceedings against state workers who have been charged with various offenses. Some 2,000 oath-breaking civil servants would be the first to go, according to Troika demands.
“I believe the ultimate details of a deal with the roika will be finalized by Monday night, (April 15,)” Alternative Minister Christos Staikouras said. Greece has agreed to dismiss 15,000 public sector workers and hire as many younger employees, Staikouras said, which would negate any reduction in force from the firings and could almost certainly spark fierce resistance from labor unions.
Meanwhile, Troika inspectors checking Greece’s books said said they have finished their review of the country’s progress on delayed reforms and that 10 billion euros ($13 billion) in two installments will be paid as soon as next month.
The news came as Eurozone finance ministers were meeting in Dublin, Ireland to scrutinize the economies of Greece, now in a sixth year of recession, and Cyprus, where the government is awaiting a 10 billion euros ($13 billion) rescue package.
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