The two IMF/EU bailout loans that averted a major sovereign default and almost certain exit from the Euro were hardly an act of European altruism or solidarity. Greece has to pay interest on the loans which are disbursed in tranches and agree to wide ranging economic and social reforms which the creditors believed would restore long-term stability to the Greek economy and put it back on the path of growth.
Some of the perks which certain groups of Greek citizens were entitled to would raise eyebrows almost everywhere else. For instance, Greek civil servants whose jobs required them to work for more than five hours per day in front of a computer screen were entitled to an extra six days of annual leave. This practice is to cease under current reforms and will return 5000 man-days to the Greek civil service. Similarly, payment of an attendance bonus will also come to an end as will the practice of allowing an unmarried daughter to claim her late father’s pension.
Strike action has been called in protest against public sector lay-offs and mandatory transfers, approved in July. The transfers will put 25000 public employees into a “mobility pool” by year’s end and they will then either be required to redeploy if they are not made redundant. Their salaries have been reduced whilst they wait to learn their fate. 15000 civil service jobs are likely to be axed by the end of 2014 as part of the nation’s austerity measures. The Greek civil service is widely regarded as bloated, inefficient and in need of reform, but this will be of no comfort to those at the sharp edge of the reforms.
The Greek economy has contracted by 23% since 2008 and is expected to shrink by a further 4.2% this year. The Greek PM believes that the recession is slowing and that the deficit will soon be eliminated. It is estimated that Greece may need a further €10 billion to meet its needs before it is out of the woods.