ATHENS, Aug 31 (Reuters) - Greece plans to further slash pensions, social spending and public sector wages to find the bulk of nearly 12 billion euros of savings required to satisfy lenders, according to a draft list of measures obtained by Reuters on Friday.
The draft list includes a controversial plan to dismiss civil servants, a move that will test the cohesion of Greece’s fragile three-party coalition led by Prime Minister Antonis Samaras.
Even if political leaders agree on the measures, they need approval from European Union and International Monetary Fund inspectors who return to Athens next week.
Depending on whether they deem the measures credible and verifiable, the inspectors will draft a report that will determine if the EU and the IMF continue to support Greece, allowing the country to avoid a messy default and possible exit from the euro.
Out of almost 12 billion euros of spending cuts targeted in this latest round, 4.6 billion euros are earmarked from reduced pensions, 1.39 billion from health, 1.32 billion from state salaries and 1.27 billion from administrative costs.
The list, obtained from a Greek coalition source, was formulated by the country’s finance ministry and was submitted earlier this week for approval to the leaders of the three parties in the ruling coalition.
Even though the leaders broadly agreed on the plan, they said that some measures still needed further work to make sure it did not disproportionately hurt the poor and needy.
Samaras’s junior coalition partners, the Socialist PASOK and the moderate Democratic Left, especially oppose across-the-board wage and pension cuts.
They also oppose a so-called “labour reserve” scheme, under which up to 40,000 civil servants could be set for dismissal.
Previous austerity packages have caused outcry and violent demonstrations. Under the weight of public reaction and defections from some of its own lawmakers, the country’s Socialist government resigned in late 2011, making way for the two coalition governments that followed.
Prime Minister Samaras has vowed he will do everything in his power to convince lenders he can implement the new cuts, and in return hopes to win his country more time to repay its debts.