Austerity plan to hit civil service

Prime Minister George Papandreou will press forward with «painful but socially just measures» aimed at getting the Greek economy back on track by curbing the wages and benefits of middle-income public servants, sources close to the premier have told Kathimerini. The insight into Papandreou’s plans came as the premier prepares today to inspect a draft version of a Stability and Growth Plan which has been drawn up by Finance Minister Giorgos Papaconstantinou and is due for submission to Brussels almost immediately. Officials from the European Commission and the European Central Bank have said they will visit Athens on Wednesday to inform the government whether they believe that the proposed measures will be adequate to breathe life back into the Greek economy. According to sources, the 40-page draft plan, expected to be submitted as early as this afternoon, includes proposals for curbing the benefits and freezing the salaries of civil servants currently earning 2,000 euros or more per month. Meanwhile, sources have told Kathimerini that Papandreou has had several telephone discussions with financial advisers to US president Barack Obama about the action that Greece should take to slash state spending and curb its gaping budget deficit, which stands at 12.7 percent of gross domestic product. Kathimerini also has learned that Papaconstantinou is planning a trip to the USA where he is to meet with representatives of major American investment groups in a bid to promote the purchase of Greek government bonds. The government must raise an estimated 54.6 billion euros to service its debt.

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