Greece to cut civil service jobs, despite protests

To the surprise of some, Greece's coalition government has agreed to demands to cut civil service jobs. About 15,000 positions will be cut this year. The decision comes amid mounting global pressure to agree on austerity measures that are needed to secure major new debt agreements.

LOS ANGELES, CA (Catholic Online) - The announcement marks a major shift in Greece's policy. State jobs until now have been protected during the country's acute financial crisis, which started two years ago.

Greece's Minister for Public-Sector reform Dimitris Reppas says that the job cuts would be carried out under a new law that allows such firings.

"[The cuts] are coming as part of a commitment to fire 150,000 public service workers... This is in addition to 200,000 public service employees who have left through [negotiated] dismissal, early retirement and firing," Al Jazeera's John Psaropoulos reported.

Greece is struggling to push through drastic, but much needed reforms and clinch a $170 billion bailout deal from its European partners and the International Monetary Fund to avoid a March default on its bond payments.

Greece has remained solvent since May 2010 by payments from a $145 billion international rescue loan package. A second bailout was decided last October when it became apparent the money would not be enough.

In addition to the austerity measures, separate talks with banks and other private bondholders to forgive $131.6 billion in Greek debt must also be held. This entails an exchange for a cash payment and new bonds worth 50 percent less than the original face value, longer repayment terms and a cut in the interest rate to be paid on the bonds.

Private investors are expected to take an overall cut of up to 70 percent on the value of their bonds.

Delays in negotiations with rescue creditors pushed a crucial meeting of coalition party leaders back by one day.

"We are opposed to indiscriminate firings," Reppas said. "The work force reduction is strictly connected with the restructuring of services and organizations at each ministry."

Officials at the public-sector reform ministry gave no details of the new plan, or say how many of the job cuts would be made.

Greece has previously promised to reduce its 750,000-strong broader public sector by 150,000 by the end of 2015, insisting it could reach that target through staff attrition.

German Chancellor Angela Merkel says Greece has had to come to terms with the "troika" of lenders, the European Commission, European Central Bank and IMF to get the funds it needs to meet massive debt repayments in March.

Speaking in Paris alongside French President Nicolas Sarkozy, Merkel said she wanted quick action from Athens.

"We want Greece to stay in the euro," she said. "[But] I want to make clear once again that there can be no deal if the troika proposals are not implemented. They are on the table, time is of the essence. Something needs to happen quickly."

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Germany remains Europe's main paymaster. Merkel reiterated that the deal affected not only Greece but the wider currency bloc, which fears that a default would hit much larger economies such as Spain and Italy.

"A lot is at stake for the entire eurozone," she said.

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