Debt inspectors tell Greece to axe jobs, wages - The Best from Greece

Greece's debt inspectors have told the troubled country to axe public sector jobs and wage guarantees, after conceding that its austerity program had failed to drastically reduce budget deficits.

 

IMF envoy Poul Thomsen told a fiance conference that the government now had no choice other than to sack public servants, having exhausted its tax-raising abilities.

 

"Greece might have to accept involuntary redundancies ... and address the legacy of too high and inflexible wages," Thomsen said.

 

"I cannot see how fiscal recovery can proceed without addressing these taboos." He added: "We are also warning that unless there is an acceleration of reform in the public sector, the deficit will get stuck at around 10 percent. We made this warning at the end of this year: There are no more low-hanging fruits."

 

Government officials have conceded that a program to suspend public servants on reduced pay have also fallen far short of targets.

 

 

Horst Reichenbach has said that Greece must improve the competitiveness of its damaged economy if it is to remain in the eurozone.

 

"After a very difficult 2011, it will be very important to make 2012 a year of success in improving competitiveness," Reichenbach, head of the European Commission's special task force on Greece, said at the same conference.

 

A more efficient and competitive economy would be essential to retain membership of the eurozone, Reichenbach said.

 

He said the government must improve conditions for exporters, cut red tape, simplify the business environment and introduce reforms to make the justice system more efficient. (Reuters/Athens News/GW)