Greeks Move to Slash State Jobs for 30,000

NIKI KITSANTONIS

The New York Times

October 2, 2011

ATHENS — Af­ter marathon talks with for­eign au­ditors, the Greek govern­ment said Sunday that it had reached a deal on how to slash its unwieldy public sector by putting 30,000 workers on a scheme that would lead to early re­tire­ment for some and dismissal for oth­ers, in a bid to meet con­ditions set by for­eign lenders for the re­lease of crucial emergency loans.
The govern­ment also completed a draft bud­get for 2012, which is expected to be presented in Parlia­ment on Monday and voted on by the end of October, and conceded that it would miss a deficit-reduction tar­get of 7.6 per­cent of gross do­mes­tic prod­uct. The deficit is projected to equal 8.5 per­cent of G.D.P. this year. The deficit       

short­fall had been expected because of delays in carrying out reforms and a deeper-than-expected re­ces­sion, with the Greek econ­o­my forecast to con­tract by 5.5 per­cent this year.

In com­ments made late on Sunday af­ter a cab­i­net meeting, a govern­ment spokesman, Il­ias Mossia­los, said Sunday’s deal was the result of “long and diffi­cult negotiations” with for­eign au­ditors and that it constituted the “gen­tlest pos­sible scenar­io in terms of social repercus­sions.”
Accord­ing to the text of the draft law dis­tributed to the local news me­dia, 30,000 civ­il servants — or 3 per­cent of the public work force — would be put on reduced salary by the end of the year. The major­ity, some 23,000, are at least 60 years old and essentially would be         

forced into early re­tire­ment. The re­mainder would lose their po­sitions through the merg­ing and abo­lition of dozens of govern­ment agencies. Mr. Mossia­los said the plan would save the govern­ment some 300 million eu­ros, or $400 million, from the public sector wage bill in 2012.

The Greek govern­ment is in a race against time to convince rep­resentatives of the Eu­ropean           

Commis­sion, the Eu­ropean Central Bank and the International Mon­etary Fund, known as the troika, that it will make good on pledges to put its financial house in or­der. With­out the re­lease of about $11 billion in aid — part of a 110-billion-eu­ro bailout agree­ment reached last year — Greece could run out of mon­ey this month and face a default that would shake the eu­ro zone and glob­al mar­kets.

The deci­sion on whether to re­lease the cash is expected to be made on Oct. 13 at an extraor­dinary meeting of Eu­ropean finance min­is­ters, but it will depend on the troika of­ficials, currently in Athens, issu­ing a pos­itive report about Greece’s efforts at fiscal overhaul. A chief source of frus­tration for for­eign au­ditors has been the delays in carrying out reforms and an ap­par­ent re­luctance by the govern­ment to reduce the country’s public payroll.