Greek Parliament Passes Plan for Layoffs

The New York Times

April 28, 2013

By NIKI KITSANTONIS

ATHENS — Greece’s Parliament late Sunday approved a contentious plan to dismiss 15,000 civil servants by the end of next year as part of a new package of economic measures that the country must enforce to clinch crucial financing from foreign creditors.

Euro zone officials meeting in Brussels on Monday are expected to approve the release of about 2.8 billion euros, or about $3.65 billion, in loans. The money had been due in March but was delayed after negotiations between Greece and the so-called troika of its foreign lenders stalled over the lenders’ demands for civil service cuts.

The troika, which comprises the European Commission, the European Central Bank and the International Monetary Fund, has been meting out aid in exchange for belt-tightening measures. They are to decide on another six-billion-euro installment in May, assuming Greece adopts further reforms, including an overhaul of a tax collection system.

The latest measures passed into law in a vote held shortly before midnight on Sunday with 168 votes in the 300-seat House.

A last-minute amendment allowing local authorities to hire young Greeks for less than the minimum wage of 586 euros per month fueled protests during the debate. But the inclusion of measures aimed at easing the burden on Greeks, including a 15 percent reduction to a contentious property tax, clinched the support of lawmakers in the three-party ruling coalition.

Defending the bill during a heated debate, Finance Minister Yannis Stournaras insisted that Greece had no choice but to implement the economic reforms. “Greece is still cut off from the markets,” he said, noting that the government’s chief aim was to achieve a primary surplus before seeking a further “drastic haircut” to its debt, which stood at 160 percent of gross domestic product at the end of last year.

His claims were derided by political rivals who denounced the lawmakers as beholden to the nation’s lenders. “With blood, tears and looting, they will achieve surpluses like those achieved by Ceausescu in Romania and Pinochet in Chile,” said Alexis Tsipras, the leader of the main leftist opposition party Syriza. “Claim back your lives and your country that they are stealing,” he said as a few hundred Greeks, mostly civil servants, staged a rather low-key protest outside Parliament.

Mr. Tsipras, whose party wants to revoke Greece’s loan agreement, has insisted that Greeks have an alternative to constant belt-tightening, pointing to a strong reaction against austerity across Europe.

The ruling coalition, led by Prime Minister Antonis Samaras, faces a difficult balancing act to reassure its foreign creditors and its long-suffering citizens, who have seen their incomes dwindle by a third and Greek unemployment skyrocket to 27 percent in the past three years.

Eager to bolster the prospects for investment, the prime minister is also said to be planning a series of international trips, starting with a visit to China next month.

He is expected to meet with entrepreneurs and promote Greece as a destination for tourism, virtually the only robust pillar of Greece’s shaky economy.