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The next payout of international aid to Greece could be split into instalments because Athens has not met an end-of-week deadline to decide which civil servants will lost their jobs.
Olli Rehn, the EU’s economic and monetary affairs commissioner, has confirmed some of the next bailout cash could be held back until the layoff issue is resolved.
“It is possible, but not certain,” Rehn told a seminar in his hometown of Mikkeli, Finland, when asked about the issue. “It all depends on whether Greece can meet all requirements that they are committed to.”
Talks continued between the government and troika officials from the European Union, International Monetary Fund and the European Central Bank in the hope agreement can be reached before a eurozone finance ministers meeting on Monday.
On Friday evening Greek finance ministry official said the two sides were “close” to a deal.
The next tranche of aid is 8.1 billion euros. It is needed in part to repay about 2.2 billion euros of government bonds which come due in August.
Some of the 12,500 people who face losing their jobs rallied outside ministry buildings in Athens on Friday.
One worker complained: “We went to bed as municipal employees and woke up laid off. This is the logic of the troika and the government, the sudden death of workers. Just because they can’t get the numbers right, they will drive families to poverty and workers to unemployment.”
Those facing the axe include municipal police officers and teachers.
A so-called mobility scheme has been set up where workers are put on part salary for a year. If a new position cannot be found for them in that time they are fired.
Greece has proposed putting 3,500 municipal police workers immediately into the scheme and transferring high school teachers to primary schools with staff shortages, officials at the administrative reform ministry said after talks on Friday.
It was not clear if the troika had accepted the proposal.
Greece’s public-sector union called a strike for Monday in protest at the lay offs.