Greece: 15,000 public-sector jobs to be slashed as debt crisis continues

Greece announced today it would slash 15,000 public-sector jobs as part of new austerity measures required to secure credit from international lenders, according to The New York Times.

The Times said Athens was hurriedly enacting fiscal and spending changes so that creditors will release about $170.5 billion in new bailout funds needed to avoid defaulting on bond payments that mature next month.

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The spending cuts were almost certain to be deeply unpopular at home, where protests have turned violent in recent weeks. Public anger at the handling of the debt crisis has threatened to undermine the government. Two main labor unions have called a 24-hour general strike for Tuesday that is expected to disrupt public services including transport while three rallies are planned just for Athens, according to The Times.

At the same time, Greece’s debt crisis has sent ripples through world markets and caused worries that, along with other indebted governments in Ireland and southern Europe, it could cause another economic collapse just as the world economy emerges from the financial crisis of 2007 to 2009 or begin the collapse of the European single currency.

Citing data released today, The Times reported that Greek sovereign debt had risen to 159.1 percent of GDP in the third quarter of 2011. Eurozone members are required to limit debt to 60 percent but across the monetary area of 17 nations sovereign debt as a whole now stands at 82.2 percent.

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As debt talks continued with Greece’s lenders, Reuters reported this afternoon that the euro had dropped against the U.S. dollar while parties in Greek governing coalition delayed accepting the terms of a new bailout package. The euro was down 0.2 percent at $1.3116 after hitting a low of $1.3026, according to Reuters, which said stop-loss orders are triggered below $1.3050.

Reuters said a Europan Commission spokesman said Greece had already missed a deadline to finalize the debt package.


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