Eurogroup OKs funding release for Greece
After a flurry of last minute negotiations, Greece secured it would receive installments of the rescue package that is keeping its economy afloat at a meeting of eurozone finance and economy ministers on July 8.
Greece's creditors approved the release of €6.8bn over the next few months, but imposed strict conditions. The country has to sticks to the agenda of cuts and reforms it has agreed in return for the bailout loans — including the firing of more than 10,000 civil servants by the end of the year.
Representatives of the so-called troika -the European Central Bank, the European Union and the International Monetary Fund - said on Monday that Athens' reform program is largely on track, although it's moving too slowly. However they warned that Greece's economic outlook remains uncertain.
"Greece is getting on track," German Finance Minister Wolfgang Schaeuble said as he left the meeting in Brussels. "It is not easy for them."
Greece is currently going through its 6th year in recession. Its unemployment rate is the second highest in the European Union, standing at just under 27 percent. Well over half its under 25s are unemployed and it looks doubtful that the country will be able to escape its recessionary cycle.
In 2009 it received a bailout that eventually came to €240bn but in return it has promised to stick to a tight programme of cuts and reforms which have consistently lagged behind schedule.
"In short, it is time to step up the momentum of reform in Greece, support the return of confidence for the sake of sustainable growth and job creation," said the EU's monetary affairs commissioner, Olli Rehn.
The government must put 12,500 civil servants on administrative leave by the end of the year, with the possibility of dismissal. They include 2,200 school security personnel; 3,500 members of the Athens municipal police, which will then be disbanded and absorbed into Greece's police force; at least 2,000 local government employees; 1,500 teachers; and employees of various ministries.
"Firing civil servants is always difficult, that is difficult in every country, certainly in such economic circumstances," said Jeroen Dijsselbloem, who is head of the eurogroup meeting and Dutch finance minister.
They will be paid 75 percent of their normal salary and be subject to dismissal if they aren't transferred to other state agencies within eight months.
Belgian Finance Minister Koen Geens said the loans would be divided into three groups and disbursed in July, August and October.
Municipal workers across the country went on strike to protest the plan, while the country's civil servants union, ADEDY, called a work stoppage from noon for all civil servants in the capital, Athens.
Since signing on to be bailed out in spring 2010 Greece has seen four different governments installed and a rise in the electoral ratings of far-right party Golden Dawn, successive strikes and extended social unrest.