NEWS

Plans for state cuts divide PASOK

The tough reforms the government is being asked to impose by its foreign creditors — chiefly wage and job cuts in the civil service — were the focus of a tense meeting of ruling PASOK MPs on Tuesday, as was the prospect of holding a referendum with the aim of refreshing the government?s mandate.

According to sources, Administrative Reform Minister Dimitris Reppas told fellow Socialist cadres that Greece?s creditors were pushing for very painful cuts to the civil service with layoffs to include permanent staff. Authorities would get around a constitutional provision protecting the permanent nature of civil servants? jobs by abolishing and merging state bodies and thus eradicating the positions.

A labor reserve scheme, aimed at putting civil servants on heavily docked wages for 12 months, would apply to some 60,000 employees on open-ended contracts and the long-term aim is reportedly to cut 200,000 public sector jobs by 2015.

Sources said that several MPs condemned the plans, with some suggesting that larger wage cuts be carried out to save jobs. There were also a number of objections to the idea of holding a referendum on constitutional reforms as a way to renew the government?s popular mandate, with some MPs fearing such a vote could expose the government to snap polls. Others said it could provide a valuable message.

In a related development, Finance Minister Evangelos Venizelos rejected reports that a referendum would pose the question of whether Greece should remain in the eurozone. ?Greece?s participation in the eurozone and the euro is an irrevocable and fundamental national choice that the Greek population is making sacrifices to safeguard,? he said