Troika Gets Tough on Greece: Start Firing People

Troika officials aren’t buying Greek Prime Minister Antonis Samaras’ spending cut plan and want more action

Greek Prime Minister Antonis Samaras’ hopes to get a quick sign-off from international lenders on his uneasy coalition government’s plan to make $14.6 billion in spending cuts the next two years were dashed when they told him the projections were off target and that he has to start shedding public payrolls of scores of thousands of workers quickly.

With his reluctant partners, the PASOK Socialists and tiny Democratic Left, already balking over some of the measures, particularly pay cuts, slashed pensions and the plan to lay off 35,000 workers and then fire them, Samaras finds himself in a political and economic dilemma.

The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) is withholding a $38.8 billion loan installment, the last from a $152 billion rescue package, and said it won’t release a second bailout of $173 billion until he complies.

The stumbling block is believability, as Troika inspectors said they don’t find the projected savings in some areas to be credible, particularly health care, reduced administrative spending and defense cuts. There was little progress on Sept. 10 in talks they had with Samaras and his Finance Minister, Yiannis Stournaras, admitted: “It’s a difficult decision. We are trying to convince them of the soundess of our positions.”

A senior Greek officials told the news agency Reuters that the Troika was hanging tough, even as strikes have begun in Greece from workers enraged that the government is planning another round of austerity that Samaras admitted as “unfair and unjust,” but which he said were necessary to prevent the country from going bankrupt and being forced out of the Eurozone of the 17 countries using the euro as a currency. “They insist on rejecting the measures that concern the restructuring of the state,” the official said. “We insist that they accept them.”

Samaras finds himself at odds with both the Troika and PASOK leader Evangelos Venizelos and Democratic Left chief Fotis Kouvelis, whose constituency is public workers and labor unions who have vowed to resist more cuts, and as both parties find their popularity plummeting. They don’t want to fire workers, and the Greek Constitution forbids the practice. “Our European partners must realize that the Greek people can’t take it anymore,” Kouvelis told reporters after meeting Samaras a day before the Premier met the Troika.

But compounding the position of Venizelos and Kouvelis is that the Greek civil service is packed with hundreds of thousands of unnecessary workers hired in return for votes and who do almost nothing except collect pay checks.

Before the Troika’s hardline, Samaras got a little hope from German Chancellor Angela Merkel, whose country is footing much of the bailout bill, when she suggested his idea of getting more time to implement reforms and meet a target of reducing the country’s deficit from 9.3 to 3 percent could be considered. He never asked her that directly in a meeting in Berlin last month, however, saying Greece had to commit itself to following the Troika’s demands first.

All the numbers are against the New Democracy Conservative leader Samaras, however, as data showed industrial output dropped 5 percent year-on-year in July with manufacturing slumping 7.8 percent as existing austerity measures stifled domestic demand and have worsened a five-year recession that has left nearly two million people without work and made the economy shrink by 7 percent with little hope of recovery for many years.

Greece’s union federation for public sector employees, ADEDY, says it is planning a general strike along with its private sector counterpart GSSE to protest the new measures. Strikes and protests that often turned into riots brought down the previous administration of then-PASOK leader George Papandreou, who is going to Harvard to teach government.


  1. Shame on Pasok for trying to score cheap populist political points against ND for austerity they themselves agreed too. Why is Pasok playing roulette with our country.  Make no mistake if these cuts don’t happen the austarity that happens due to lack of EU funds will be far far worse than what the ranting populists didn’t want to agree too.

    These unions and far leftist thugs holding Greece hostage are greedy thugs that are putting their personal pocketbooks ahead of the immediate needs of our country.

  2. I have been saying this all along years ago that the system in Greece will collapse due to public spending and the large number of useless public servants who get their paychecks without proper job description and no one believed in my words. It did happen and the situation will get more worse since the government is unable to implement the changes required by the EU. The country’s system must change for the best of all and just for some…

  3. Almost no one actually checks out the statistics to see that Greece per capita has a much lower number of civil servants than the rest of Europe. Do the math. 700k workers for 11 million people. In fact, Greece has fewer workers per capita than even the USA, which has notoriously low taxes.

    Are Greek civil servants largely inefficient and inept? Yes. But that’s besides the point. To quote Bill Clinton, “You need to learn arithmetic.”

    All the pensions and salaries and benefits of this gov’t working class could NEVER add up to 300 billion in debt. Try to make it add up. Add all the salaries and benefits and pensions of this class over 10 years. You won’t get there.

    But, then again, no one wants to talk about Greek corruption at the highest levels that, in cahoots with legalized money laundering and vendor finance scams at European banks, took bribes in return for the approval of gov’t contracts. The bribes were rolled into the price of the contract. Meanwhile, on the boards of those banks sat the CEO’s of the companies seeking the contracts, and when those contracts were approved, the banks gobbled up Greek bonds at the next auction.

    Yet everyone wants to blame this all on the little guy in Greece.

  4. I hope said Troika wish list for the Greeks leads to a collapse of
    the government and the institution of Syriza + whomever else is willing
    to tag along and kill of the Euro in Greece. 

    Right now, you Greeks have the power to save yourself, as well as all of Europe from this
    madness.  I hope you do it.