Greek Bailout: Troika And Greece Agree To Economic Reforms That Include Firing 15K Civil Service Workers

Delegates from the International Monetary Fund, European Commission and European Central Bank said Monday that recent steps taken by Greece indicate the country remains on track to reach its debt sustainability goals.

The three regulatory institutions, known collectively as the troika, said in a joint statement that they predict Greece will return to growth gradually in 2014.

"The recent steps taken by the authorities suggest that the March milestones are likely to be achieved in the near future," said the IMF's representative to Greece, Poul Thomsen.

As a result, the 17-nation monetary union could soon agree to disburse a pending €2.8 billion ($3.7 billion) payment to the country. Most of Greece's bailout reviews have been delayed due to missed targets or disagreements within the government. Besides initial installments, no rescue loans have been disbursed on time.

"Greece has indeed come a very long way," said Thomsen during an economics conference in Athens. "The fiscal adjustment in Greece has been exceptional by any standard."

One key fiscal adjustment will be the identification of redundant civil worker positions and eliminating them. Debt negotiations stalled in March over how to overhaul the bloated civil service sector. Reports suggest that about 4,000 civil servants will be fired by the end of 2013 followed by 11,000 more by the end of 2014.

Greek Finance Minister Yannis Stournaras, also speaking at the same economics conference, announced that several thousand underperforming public sector workers would be dismissed, and new, capable employees would replace them. The firings are "targeted at disciplinary cases and cases of demonstrated incapacity, absenteeism and poor performance, or that result from closure or mergers of government entities," said Stournaras.

Stournaras agreed that if Greece continues implementing its pledged reforms it will reach its budget targets without needing further austerity measures imposed.

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