Greece is to send to the troika on Friday a list of savings worth 6.5 billion euros over the next two years as it looks to find the remaining 5 billion euros in cuts, with the coalition parties still divided over whether sackings in the civil service should form part of the package.
New Democracy, PASOK and Democratic Left have agreed on how just over half of the savings will be made, but have yet to settle on the remainder, despite daily contacts between party representatives and leaders.
The option of reintroducing a labor reserve scheme, whereby as many as 40,000 civil servants would be removed from their posts is being considered. They would continue to receive up to 70 percent of their salary for at least a year, Finance Ministry sources said.
The measure, which was abandoned last year after some 7,000 departures, is opposed by PASOK and Democratic Left. Justice Minister Antonis Roupakiotis, chosen by Democratic Left, suggested on Thursday that the labor reserve could fall down if challenged in court.
“As justice minister and thinking legally, it is a set of measures that does not led anywhere,” he said. “Courts have already ruled that the labor reserve clashes with the constitution.”
The leftist party’s other cabinet choice, Administrative Reform Minister Antonis Manitakis, is also thought to be skeptical about the measure. Manitakis met on Thursday with PASOK MP Giorgos Dolios, who is the party’s spokesman on civil service issues. After the meeting, Dolios was clear about PASOK’s objections.
“For this measure to be adopted, the coalition’s policy agreement has to be changed,” he said. “The pre-election pledge that there would be no sackings in the civil service remains.”
Dolios explained that PASOK is basing its reluctance on two main points. “We must not heighten the sense of insecurity in the civil service at a time when we are asking them to play a part in the reform of the public sector,” he said. “Also, the previous experience with the measure did not produce the expected result.”
Sources said that some of the remaining savings could come from further reductions in ministry budgets. Prime Minister Antonis Samaras called ministers on Thursday to ask if they could reduce their departments costs. The government believes a 25 percent reduction in non-wage costs could save some 4 billion euros.
Meanwhile, Samaras’s office confirmed that he will not be delivering the traditional economic policy speech at the Thessaloniki International Fair next month.