NEWS

Civil servants to face chop in new austerity drive

A meeting of eurozone finance ministers in Brussels looked set to end on Monday without any firm decision on how Greece?s debt crisis should be dealt with, although the government in Athens appeared ready to start dispensing with some civil servants in a bid to secure continued loans from the European Union and the International Monetary Fund.

The finance ministers, including Greece?s Giorgos Papaconstantinou, had not arrived at a decision by late Monday night on how to deal with Greece?s spiraling debt. Possible restructuring or reprofiling of Greek debt as well as the option of a second bailout are believed to have been discussed in Brussels. In Athens, meanwhile, the government seemed to be broaching a taboo subject as Interior Minister Yiannis Ragousis indicated that thousands of civil servants could be fired during upcoming departmental transfers. The government has so far resisted calls from the EU and the IMF to fire about 30 percent of the civil service, instead saying that it would gradually reduce the number of employees by only hiring one candidate for every five who leave.

However, this looks set to change. The government has said it will transfer some 130,000 civil servants to other departments. Ragousis indicated yesterday that the Supreme Council for Personnel Selection (ASEP) would evaluate them and that any who were deemed ?not worthy of working in the public sector? would be sacked.

The troika is likely to maintain the pressure on Greece to fire civil servants as it has serious doubts about whether the government is capable of making the 26 billion euros of savings that it has budgeted for by 2015. Six billion euros of those cuts will have to come this year, troika officials have told the government.

Athens is expected to make public its revised midterm fiscal plan on Thursday, when it will reveal what measures it has agreed to in order to secure ongoing financial assistance from the EU and the IMF. Ministers expressed concern during Monday?s cabinet meeting that the detention of IMF Managing Director Dominique Strauss-Kahn, detained in New York on sexual assault charges, could weaken Greece?s negotiating position, especially if it asks for a second bailout, since Athens considered him to have a pro-Greek stance compared to the European Commission and the European Central Bank.