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Strike trouble for Greece ahead of creditor audit

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    Demonstrators march outside the ministry of labour in Athens during a protest by civil servants on August 5, 2013 against cuts and job relocationAFP/File

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    People walk through a shopping arcade in central Athens with most of businesses closed on September 12, 2013.AFP/File

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    School guards stand in front of the interior ministry in Athens on September 4, 2013 during a protest against relocationAFP/File

Debt-wracked Greece is bracing for a fresh series of strikes this week against a redeployment scheme affecting thousands of civil servants, as its creditors arrive to examine reforms carried out by Athens in exchange for new loans.

Greece has agreed to redeploy 12,500 civil servants by the end of September as part of a general restructuring of its public sector, in return for the next instalment of its EU-IMF rescue loans.

In response, state school teachers will kick off a five-day strike on Monday that could be extended indefinitely, and civil servants have called a separate two-day strike starting Wednesday, backed by hospital doctors, social security staff, tax collectors and lawyers.

Universities are also opposing the cuts, which will affect administrative employees, claiming that they are already short-staffed.

Civil servants have to accept new posts or spend eight months on reduced salaries as alternative posts are found, with the risk of losing their jobs altogether.

The government has already redeployed some 4,500 civil servants at the end of July, mostly teaching staff, as part of spending cuts.

Overall, Greece is due to move or temporarily cut the salaries of a total of 25,000 civil servants and axe 4,000 state jobs by the end of the year.

The reform was agreed with Greece's so-called troika of international creditors -- the European Union, the International Monetary Fund and the European Central Bank -- in exchange for crucial loans.

The technical team from the troika is due to arrive early next week, followed by senior mission chiefs on September 22.

According to Eurobank, one of Greece's main lenders, the inspections will also touch upon the privatisation of three ailing industries -- mining company LARKO, truck manufacturer ELVO and defence contractor EAS -- and the drafting of a new property tax.

Greece is hoping that the audit can be wrapped up before an October 15 Eurogroup meeting which will decide whether Athens should receive a scheduled loan slice of 1.0 billion euros ($1.33 billion).

But a greater priority for Greece is securing additional help for its recession-plagued economy, a prospect that European officials are expected to discuss in November.

In November last year, eurozone leaders kept the door open for more rescue loans if Greece achieves primary surplus and carries out structural reforms, including an overhaul of its public sector and its tax system.

The Greek government now wants to capitalise on that promise.

Last week Athens said it had achieved a primary surplus of 1.5 billion euros ($2 billion) in the first eight months of the year, instead of an expected 2.5-billion-euro deficit.

A primary surplus is a state budget surplus excluding the cost of servicing debts.

However, the economy is still shrinking -- albeit at a slower rate -- and unemployment is still growing.

"The situation is under control, but certainly (a primary surplus) does not point to a vigorous economy," Panagiotis Petrakis, an economy professor at the University of Athens, told AFP.

Greece has received two EU-IMF aid packages worth 240 billion euros since 2010 in a bailout plan that will wind down next year.

But there is now widespread acceptance that it will need a third rescue package, probably amounting to 10 billion euros ($13.3 billion).

The IMF has forecasted that Greece will need 4.4 billion euros in 2014 and another 6.5 billion in 2015.