Flying into the capital at the start of a quarterly review of the debt-choked economy, mission heads from the EU, International Monetary Fund and European Central Bank were told flatly that mass firings were out of the question when unemployment had reached a European record of 27%.
"The public sector has shrunk by 75,000 people in the last one and a half years," the finance minister, Yannis Stournaras, told a newspaper in a taste of the stiff resistance the auditors are likely to meet. "There will be no layoffs."
The Eurogroup of finance ministers is expected to discuss the dire situation in Greece and Cyprus, which has asked for a bailout worth almost 100% of its national income.
Stournaras, a technocrat widely credited with smoothing often fraught relations between Greece and its foreign lenders, has encountered mounting hostility from within the tripartite government over the dismissals.
Athens agreed to cut 150,000 posts from its unwieldy public sector by 2015 as part of a wide-ranging package of austerity reforms promised when the "troika" unlocked €54bn in long overdue aid in December.
Under that plan, 25,000 employees were to be transferred this year to a "mobility" scheme, the first step towards redundancy. Streamlining so far has relied on a policy of natural attrition, with only one person being hired for every 10 who retire.
But the conservative-led administration has faced growing pressure from its leftwing junior partners. Acutely aware of the country's economic tailspin, Fotis Kouvellis, who leads the Democratic Left, has warned that with 1.4 million Greeks now unemployed, the prospect of yet more losing work could threaten the fragile social peace.
Mired in what economists are calling a "great depression", with its GDP set to contract for a sixth straight year, Greece is projected to see unemployment exceed 30% by the year's end as a growing number of businesses file for bankruptcy. Over 60% of those without work are under 25. (guardian.co.uk)
http://www.examiner.com/article/greece-downgraded-to-an-emerging-market?...
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