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nder its loan agreement, Greece had promised to reduce the state payroll by 150,000 civil servants by 2015/FILE

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Greece aims to stem layoffs, extend recovery

nder its loan agreement, Greece had promised to reduce the state payroll by 150,000 civil servants by 2015/FILE

ATHENS, Jun 23 – Greece’s new coalition government will seek to stem layoffs and extend by two years the application period of a tough recovery plan imposed in return for EU-IMF loans, an official document said on Saturday.

The policy document released by the conservative-led coalition government said an upcoming effort to “revise” Greece’s EU-IMF bailout deal in talks with creditors includes “the extension of the fiscal adjustment by at least two years” to 2016.

The aim would be to meet fiscal goals “without further cuts to salaries, pensions and public investment” and new taxes, it said, announcing a freeze on further civil service layoffs and a boost to unemployment benefits.

“The aim is to avoid layoffs of permanent staff, but to economise a serious amount through non-salary operational costs and less bureaucracy,” the document said.

Under its loan agreement, Greece had promised to reduce the state payroll by 150,000 civil servants by 2015, including 15,000 this year.

The new government said it also wanted to review minimum wage cuts and measures taken earlier this year to facilitate private-sector layoffs, arguing that collective labour agreements would “return to the level defined by European social law” and what Europeans have agreed on.

It said employers and unions should be allowed to set the private sector minimum wage, which was cut by 22 percent to 586 euros ($736) in February among additional austerity measures taken to clinch a new rescue deal.

The blueprint is designed to reduce anger in Greece towards the austerity policies of the EU-IMF loan agreement which are deemed to have deepened a recession continuing for a fifth year.

Over a quarter of Greece’s workforce — 1.12 million — are now jobless according to official figures.

But Greece remains under intense international pressure to implement the terms of the EU-IMF bailout package that has kept the indebted country’s economy afloat for two years.

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European Commission, IMF and European Central Bank inspectors return to Athens on Monday to resume discussions suspended because of Greece’s two-month political deadlock, brought to an end by the elections.

The appointment of Greece’s new finance minister was delayed on Friday after the candidate, the 65-year-old chairman of leading lender National Bank Vassilis Rapanos, was hospitalised with stomach pains.

Rapanos is expected to be released on Monday, news reports said.

Newly-elected Prime Minister Antonis Samaras was also forced to cancel a parliamentary speech on Friday to undergo eye surgery for a retinal detachment.

Samaras is likely to remain in hospital on Sunday and follow-up tests will determine whether he can fly to an EU summit in Brussels next week, state television said.

In its first pronouncement on Thursday, the new coalition government said it planned to revise the EU-IMF loan bailout while safeguarding its place in the eurozone.

The coalition is headed by the New Democracy party and backed by the Pasok socialists and the small Democratic Left party. It can count on 179 deputies in the 300-seat parliament.

The new team has nevertheless pledged to honour Greece’s targets on deficit reduction, debt control and structural reforms.

“The goal is to create the conditions to take the country out of the crisis for good and out of dependence on loan agreements in the future,” a statement said on Thursday.

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