Government mulls labor reserve plan

Talks between Finance Minister Yannis Stournaras and Administrative Reform Minister Antonis Manitakis on Friday reportedly focused on the possible resurrection of a so-called labor reserve scheme, aimed at cutting state spending by reducing civil servant numbers, but neither revealed whether the government would press ahead with the controversial scheme, condemned by critics as unconstitutional.
Speaking to reporters, Stournaras simply said, “All options are still on the table,” and referred to “a climate of very good will and cooperation.”

Manitakis, who has expressed skepticism over the potential financial benefits of the scheme, appeared to have softened his stance. His ministry, he said, was examining “all scenarios” for making budget savings “within the context of existing legislation and the guarantees of the Constitution.”

The labor reserve scheme is one of several measures being considered by government officials attempting to identify 11.5 billion euros in budget cuts for 2013 and 2014.

Stournaras said the aim was to present the finalized package of measures to representatives of Greece’s creditors -- the European Commission, the European Central Bank and International Monetary Fund -- “toward the end of August,” noting that the focus would be on the “general direction” of proposals, not on “details.”

In a related development, authorities announced the abolition of 10 so-called “special secretariats” attached to ministries. The move will not result in any layoffs as all staff will be transferred to other parts of the civil service, but government officials insist that the initiative will lead to savings. Meanwhile the heads of the special secretariats that are not being abolished have been replaced. Notably, the head of the Financial Crimes Squad, Yiannis Diotis, was replaced by Stelios Stasinopoulos, the former head of the tax authority in Messini and a personal choice of Prime Minister Antonis Samaras, who hails from the Peloponnesian municipality.

Samaras is said to be taking a few days off ahead of planned meetings later this month with Eurogroup Chairman Jean-Claude Juncker, German Chancellor Angela Merkel and French President Francois Hollande.

Evangelos Venizelos, the head of socialist PASOK, the second party in the coalition government, is reportedly aiming at resuming efforts to secure a two-year extension to Greece’s fiscal adjustment period in the second half of this month.

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