A Greek minister says the debt-ridden country has agreed to cut 15,000 jobs from its government workforce, amid growing international pressure to impose more unpopular austerity measures.
Public Sector Reform Minister Dimitris Reppas announced the job cuts Monday, but did not provide details. State jobs had so far been protected during the crisis, and unions, already angry over the anticipated wage cuts, have called a general strike for Tuesday.
But Caretaker Greek Prime Minister Lucas Papademos is still negotiating to get the country's socialist, conservative and far-right political parties to agree to support the new austerity measures. International lenders are demanding broad agreement among Greece's fractious parties, saying they are fearful that after a national Greek election in the coming months, lawmakers would renege on government spending cuts.
Germany and France issued a stern warning Monday, saying the agreements must be finalized for Greece to get a new bailout, the country's second in two years. Greece could receive $171 billion to avert a default on its loans next month, but the German and French leaders say the country must first cut government spending and negotiate an agreement with private creditors to cut in half the amount it owes them.
Political leaders had planned further negotiations Monday, but postponed the talks until Tuesday.
Greece has been negotiating for weeks with international financial institutions to cut $131 billion of its public debt, but has been unable to finalize the deal. At the same time, the Greek government has encountered resistance at home to demands by the European Union, the European Central Bank and the International Monetary Fund that it cut the wages of Greek workers, before securing the new bailout, the country's second in two years.
German Chancellor Angela Merkel said the public lenders' demands “are on the table. Something needs to happen quickly.” Greece's creditors say the wage cuts are necessary to make it more competitive with its trading partners.
But Greek unions and employers are resisting. One union leader, Stathis Anestis, said European leaders have no right to undermine labor agreements.
“Collective bargaining agreements in the private sector is a European right, and Europe is obligated to respect it, something that has been done up to now. That is what social agreements are based on. It is the first time there is intervention — rather it is the first time a demand is made for intervention — to annul collective wage agreements, to annul social dialogue, to annul agreements among social partners.”
Greece's precarious financial state was underscored by a new EU report. The EU said that Greece, among the 17 countries using the common euro currency, has the highest governmental debt level compared to its economic output, and that its ratio is worsening.
The EU said the Greek debt level was at 159 percent of its gross domestic product in the July-to-September period last year, up more than 4 percentage points from the previous three months. By contrast, the debt ratio for Germany, Europe's strongest economy, was just under 82 percent of its national economy in the third quarter last year, and 10 other eurozone countries recorded even lower figures.
