| No, they really don't, it's just a guerrilla action to buy time... |
The announcement Monday signals a shift in Greece's policy, as state jobs have so far been protected during the country's acute financial crisis, which started about two years ago. Public Sector Reform Minister Dimitris Reppas said the job cuts would be carried out under a new law that allows such firings.
Unions have called a 24-hour general strike for Tuesday, in response to the new austerity measures, while about 4,000 protesters braved torrential rain late Monday to join protest rallies organized in central Athens by left-wing opposition parties.
Greece is racing to push through the painful reforms -- which have yet to be agreed to by Greece's coalition partners -- to clinch a €130 billion ($170 billion) bailout deal from its European partners and the International Monetary Fund and avoid a March default on its bond repayments.
| I wouldn't call it a 'race'... |
As well as the austerity measures, the bailout also depends on separate talks with banks and other private bondholders to forgive €100 billion ($131.6 billion) in Greek debt.
| The goal for the Greek government is to lock in the haircuts for the banks without having to implement any of the 'austerity' measures... |
| That's quite a haircut. |
Greece's coalition party leaders pushed back a key meeting on the austerity measures by a day until Tuesday, due to the ongoing negotiations with EU-IMF debt inspectors who were locked in talks with the government Monday. The leaders have already agreed to cut 2012 spending by 1.5 percent of gross domestic product -- about €3.3 billion ($4.3 billion) -- improve competitiveness by slashing wages and non-wage costs, and re-capitalize banks without nationalizing them.
| The Greek GDP is about $340 billion, and their debt is about $450 billion. They're going to cut $4.3 billion? That's nothing. For that they get $130 billion in debt forgiveness. That's a lot. Which means all the squealing and crying is for show. In the end they're getting a 30:1 return on their cuts. That assumes that the cuts are real, which they won't be; the haircuts of course will be locked in on day one. |
The government has promised to reduce the 750,000-strong broader public sector by 150,000 by the end of 2015, but has so far insisted it could reach that target through staff attrition.
"We are opposed to indiscriminate firings," Reppas said. "The work force reduction is strictly connected with the restructuring of services and organizations at each ministry."
Officials at the Public Sector Reform Ministry gave no details of the new plan, nor would they say how many of the job cuts would be compulsory.