Greece faces bailout review, plays down public sector job losses

ATHENS Sat Mar 2, 2013 7:19pm GMT

Greece's Finance Minister Yannis Stournaras leaves the Prime Minister's office in Athens December 7, 2012. REUTERS/John Kolesidis

Greece's Finance Minister Yannis Stournaras leaves the Prime Minister's office in Athens December 7, 2012.

Credit: Reuters/John Kolesidis

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ATHENS (Reuters) - Officials from the European Union and the International Monetary Fund return to Athens on Sunday to assess Greece's performance under a bailout plan as the government plays down the prospect of public sector job cuts.

The heads of the "troika" mission from the EU, IMF and the European Central Bank will meet Finance Minister Yannis Stournaras to review progress on privatisations, tax administration reforms, bank recapitalisation and steps to shrink the public sector.

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.

Greece's euro zone 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.

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.

Athens wants to avoid public sector layoffs with unemployment already at a record 27 percent and likely to rise as the economy is projected to shrink 4.5 percent this year.

But the government must 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 if vacant spots are not found in the broader public sector.

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.

Bank recapitalisation 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.

Inspectors will also review steps taken to address shortcomings in tax collection and fighting tax evasion, and privatisations.

(Reporting by George Georgiopoulos; Editing by Robin Pomeroy)

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Comments (2)
pavlaki wrote:
The Greeks know that they do not have to worry about implementing anything as they will get the next tranche of money anyhow. The Euro finance ministers are too scared to do otherwise – and the Greeks know it!

Mar 02, 2013 9:38pm GMT  --  Report as abuse
2writestoo wrote:
With Van Rompuy last week was running round London like a headless chicken whilst trying to lay down a smoke screen from his **** in that he yet again threw a triads of abuse at the British electorate who want a brake put on the fascist federalisation of Europe via a referendum. This unelected puppet of Germany is fully aware that it will be Greece, Italy and or Spain that are currently an the imminent threat to the EU and France especially. The Italians have just made it clear what they think of the EU. Riots in Portugal this week have also sent messages to the corrupt Brussels’ brigade and next week the Greeks have the chance to tell the TROIKA to pay up or else they will default taking the Spanish, Portuguese, Italians, Spanish and the French with them. However what the unelected Rompuy should really be concerned about is when the anti European United Kingdom (UKIP) party gain a massive number of European members of Parliament next year together with members those from the French and Dutch right wing, added to which the Italians Spanish, Portuguese and Greek electorate will probably sent back a large number of reformists.

Mar 03, 2013 9:47am GMT  --  Report as abuse
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