Greece has embarked on an unprecedented reduction in civil servant numbers as it will have reduced the total by more than 100,000 by the end of this year, a new report by inspectors representing the country?s international creditors has shown, although further cuts will be needed after that.
The figures included in the report drafted by the representatives of the European Commission, the European Central Bank and the International Monetary Fund — collectively known as the troika — suggest that by the end of 2012, the number of workers employed in the general government and state companies will be reduced by 106,251 compared to the beginning of 2010 (when the troika began its work in Greece): The total stood at 876,732 at end-2009 and will drop to an estimated 770,481 by the end of this year.
The effort to reduce the number of civil servants in Greece will have to continue as last year there were still 1,057 more hirings in the broader public sector than planned. This excess is attributed to a change in the rules from one new hiring for every five layoffs to one for every 10, as the resulting confusion led to a gap in monitoring.
The updated troika report shoots down an article published in the Greek press on Sunday which suggested that some 70,000 public sector hirings had been made in the last couple of years. That information had temporarily worried Greece?s creditors and exacerbated the country?s worries just as it is preparing to renegotiate some of the terms in its bailout agreement.
Meanwhile the International Monetary Fund said on Thursday it is willing to discuss potential changes to the Greek bailout agreement with the new government in the context of the troika visit as of next week.
?If the new government has ideas on how those program objectives can be achieved, we?re open to those discussions,? IMF spokesman Gerry Rice told reporters in Washington on Thursday.
However he showed the Fund is in no rush to send the next tranche of money to Athens: He claimed that Greek authorities ?can manage the budget for some period of time? without the next loan disbursement.