Thursday, September 29, 2011

Greek Government Divided on Job Cuts

Wall Street Journal
September 29, 2011

Greece's Socialist government is divided over a controversial plan to cut tens of thousands of jobs in the public sector as it has promised the country's international creditors, with some agencies declining to put forward layoff plans.

Two senior government officials with direct knowledge of the matter said the issue was due to be discussed at a cabinet meeting Thursday—coinciding with the return of a troika of international inspectors to Athens—but was pulled from the agenda after many ministries failed to compile lists of personnel that would have to go. Instead, the cabinet will revisit the issue at an extraordinary meeting set for Sunday, which will also approve the country's draft 2012 budget.

The job cuts represent a highly contentious issue for the Socialist government, which has traditionally drawn electoral support from a workers in the country's coddled public sector. With the Socialists now trailing the chief opposition party in the polls, government insiders worry that the debt crisis could evolve into political crisis leading to new elections.

"It's an extremely difficult process," said one cabinet minister, who described a range of issues bedeviling the plan. "Problems vary from constitutional restraints on firing permanent staff, to real needs for even more staff in education, police and hospitals, to resistance from heads of departments to put together lists of colleagues that basically will at some point be fired."


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