Athens agrees to shed 4,000 public sector jobs in return for latest EU/IMF/ECB aid package worth €8.8bn
Greece has secured an aid package worth €8.8bn from the European Union, the European Central Bank and the International Monetary Fund after the government agreed to cuts including 4,000 public sector job losses this year.
Officials representing the troika of international creditors agreed to release the funds following a government pledge to fire thousands of civil servants in return. The deal includes the disbursement of an initial €2.8bn tranche in the coming weeks, followed by a further €6bn in May.
"Greece is stabilising and its position is becoming more secure at a time when other countries are beginning to feel uncertainty," said prime minister, Antonis Samaras.
The conservative leader said the time would soon come when Greece "no longer depends on [loan] memorandums". He added: "Greece will have growth. It will be competitive and outward-looking… we will have a strong Greece."
The IMF's visiting mission chief, Pol Thomsen, applauded the country's fiscal progress. "Greece has indeed come a long way. The fiscal adjustment has been exceptional by any standard," he said. Thomsen, once a caustic critic of the nation's economic performance, predicted that Greece would meet budget targets without further pay and pension cuts and would "gradually" return to growth in 2014.
The aid will be used to help recapitalise Greek banks. The comments also appeared to be carefully calibrated to offset the onerous terms Greece must also meet to get the aid. Under the deal, the government endorsed mass lay-offs in the civil service. Samaras said some 15,000 employees would be fired by 2015 with 4,000 redundancies by the end of the year.
Constitutionally, public sector posts are guaranteed as jobs for life – a perk initially aimed at protecting workers from unfair dismissal for political affiliations but widely blamed for the profligacy at the root of Athens' monumental debt pile. Officials hope the sackings will help redress the sense of inequity that has prevailed in the private sector where hundreds of thousands of Greeks have lost jobs since the outbreak of the crisis.
Bracing for unrest, the Greek prime minister insisted that departing bureaucrats would be replaced by a new generation of talented personnel. Samaras said: "This is not the so-called human sacrifice that some claim. This is a marked improvement of our public sector and is what Greek society is demanding."
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