Greek austerity package draft targets pensions, wages

ATHENS: Greece plans to further slash pensions, social spending and
public sector wages to find the bulk of nearly 12 billion euros of
savings required to satisfy lenders, according to a draft list of
measures obtained by Reuters on Friday.
The draft list includes
a controversial plan to dismiss civil servants, a move that will test
the cohesion of Greece's fragile three-party coalition led by Prime Minister Antonis Samaras.
Even
if political leaders agree on the measures, they need approval from
European Union and International Monetary Fund inspectors who return to
Athens next week.
Depending on whether they deem the measures
credible and verifiable, the inspectors will draft a report that will
determine if the EU and the IMF continue to support Greece, allowing
the country to avoid a messy default and possible exit from the euro.
Out
of almost 12 billion euros of spending cuts targeted in this latest
round, 4.6 billion euros are earmarked from reduced pensions, 1.39
billion from health, 1.32 billion from state salaries and 1.27 billion
from administrative costs.
The list, obtained from a Greek
coalition source, was formulated by the country's finance ministry and
was submitted earlier this week for approval to the leaders of the
three parties in the ruling coalition.
Even though the leaders
broadly agreed on the plan, they said that some measures still needed
further work to make sure it did not disproportionately hurt the poor
and needy.
Samaras's junior coalition partners, the Socialist
PASOK and the moderate Democratic Left, especially oppose
across-the-board wage and pension cuts.
They also oppose a so-called "labour reserve" scheme, under which up to 40,000 civil servants could be set for dismissal.
Previous
austerity packages have caused outcry and violent demonstrations. Under
the weight of public reaction and defections from some of its own
lawmakers, the country's Socialist government resigned in late 2011,
making way for the two coalition governments that followed.
Prime
Minister Samaras has vowed he will do everything in his power to
convince lenders he can implement the new cuts, and in return hopes to
win his country more time to repay its debts. - Reuters