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Greece to sack 4,000 state workers to unlock bail-out cash
Greece will fire 4,000 civil servants this year as part of programme of austerity measures agreed with the EU-IMF “troika” as the condition for the next €8.8bn of payments in its €270bn bail-out.

The redundancies will begin a savage round of job cuts in the Greek public sector, with another 11,000 officials due to be sacked by the end of next year.

Greece is in deep recession, GDP has contracted by 22pc since 2008 and unemployment has spiralled to 27pc as the Greek government has implemented deeply unpopular EU-IMF austerity measures or “fiscal adjustment” in return for loans.

“Our society has reached its limits. But finally we are meeting our targets and the programme is being improved,” said Antonis Samaras, the Prime Minister, in a nationally televised address.

“Soon, Greece will not depend on the memorandums. Greece will have growth, it will be competitive and outward-looking. In other words, we will have a strong Greece.”

The troika agreement means that eurozone finance ministers and the IMF board are “expected to consider approval of the review in May”, giving a green light to €2.8bn in outstanding bailout instalments for Greece.

“Greece has indeed come a very long way,” said Poul Thomsen, the IMF's troika representative. “The fiscal adjustment in Greece has been exceptional by any standard.”

The EU and IMF have predicted that Greece can meet budget targets without further austerity and that the Mediterranean country will shrug a GDP contraction of 4.4pc this year to return to growth in 2014.

All previous EU-IMF growth forecasts for Greece since the crisis began in 2009 have been wrong.

The civil service redundancies, with a target of 15,000 by the end of next year will target “disciplinary cases and cases of demonstrated incapacity, absenteeism, and poor performance, or that result from closure or mergers of government entities”.

The sackings will overturn a Greek constitutional guarantee of jobs for life for civil servants, aimed at protecting public sector workers from unfair dismissal due to their political affiliations.

The special protections and widespread political cronyism or corruption led to the Greek civil service becoming bloated, with 700,000 officials in a country of less than 11m people.

“It's still a taboo to dismiss people from the public sector. There have been no forced dismissals of employees whose positions are eliminated or who for some reason do not perform,” said Mr Thomsen.

“This dramatic rebalancing of the economy has caused a sharp increase of unemployment in the private sector while public sector employees have been protected. This is another source of the sense of lack of fairness in the process.”

Alexis Tsipras, head of the main opposition, Left-wing Syriza party, attacked the plan. “We will not consent to human sacrifice, to the beheading of civil servants,” he said.

Yannis Stournaras, the Greek finance minister, announced that his government was seeking to achieve a primary budget surplus of the budget, which does not interest payments on existing loans by this year.

If the target is met, Greece can ask the eurozone to reduce its debts, most likely to be done easing the terms of EU-IMF loans, rather than by writing down bonds that primarily held by public institutions, such as central banks.

“In my opinion, the major target now is to achieve a primary budgetary surplus this year so that we can ask for a drastic reduction in the public debt,” said Mr Stournaras.

“That will create a very positive boost in developments and would speed up our exit from the crisis.”

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