02 March 2013

Reuters: Greece faces bailout review, plays down public sector job losses

Officials from the European Union and the International Monetary Fund return to Athens 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. Greece's eurozone 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 eurozone finance ministers.

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 per cent and likely to rise as the economy is projected to shrink 4.5 per cent 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: "The public sector has shrunk by 75,000 people in the last one and a half years, there will be no layoffs", he said.

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