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Greece to get $13 billion in rescue funds

To qualify for the latest aid installment, the Greek government agrees to cut 15,000 civil service jobs by the end of 2014.

April 15, 2013|By Anthee Carassava, Los Angeles Times
  • Poul Thomsen, the International Monetary Fund's representative in Greece, said Athens would be able to avoid further austerity cuts if it fulfilled its pledge to overhaul the state sector.
Poul Thomsen, the International Monetary Fund's representative… (Simela Pantzartzi, European…)

ATHENS — International debt inspectors gave conditional approval Monday to an additional $13 billion in rescue aid for the beleaguered Greek government, but insisted that it cut thousands of civil service jobs as part of an effort to slash spending on the country's costly public sector.

Lenders from Europe and the International Monetary Fund have pressed successive Greek governments to carry out mass layoffs since Athens signed up for its first bailout, worth $150 billion, three years ago. Despite widespread opposition, Greece's three-party coalition agreed to the plan over the weekend, acceding to the tough terms of a new multibillion-dollar bailout hammered out in December.

Without its latest installment of rescue funds, Athens would be unable to pay its bills and recapitalize the country's struggling banking sector.

Poul Thomsen, the IMF's representative in Greece, said Monday that Athens would be able to avoid imposing further austerity cuts if it followed through on its pledge to overhaul the state sector.

"The fiscal adjustment in Greece has been exceptional by any standard," Thomsen said at an Athens conference on the economy.

Details of the layoff plan remained unclear. Still, in a country where 1 in 5 salaries is paid by the government, the looming layoffs break a century-old taboo: Civil servants were granted lifelong job security in 1911 in the Greek Constitution. That provision was aimed at stamping out politicization of the civil service, but it has been used as a tool of political patronage, bloating the public sector to its present size of about a million people.

The inspectors' agreement still has to be affirmed by European finance ministers, but their approval should be routine if Greece carries through with the job cuts.

Local news reports Monday suggested that about 4,000 civil servants would be laid off by year's end and an additional 11,000 by the end of 2014. European and IMF debt inspectors said the first phase of layoffs would be "targeted at disciplinary cases and cases of demonstrated incapacity, absenteeism and poor performance, or that result from closure or mergers of government entities."

In a bid to damp discontent, Prime Minister Antonis Samaras made a rare and impassioned televised address, promising to hire young workers to replace corrupt civil servants who are dismissed.

"This isn't about sacking employees," Samaras said. "This is about improving the quality of the public sector, a demand of the Greek people."

Under the weekend agreement, Greece's cash-starved coffers could see the $13 billion by early May.

With unemployment topping 27% and an acute recession deepening across the country, the government is already bracing for unrest. Representatives of Greece's powerful civil servants union announced plans to kick off protests Wednesday. Opposition politicians, too, were reeling.

"When you have an army of a million people already out of work, you cannot support these moves," radical leftist leader Alexis Tsipras said. "We won't. We will not allow for this play of human sacrificing to continue."

Carassava is a special correspondent.

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