Greece to miss debit goal, cut 30,000 jobs

Greece will miss this year's deficit target by $2.4 billion, the government said, vowing to fire thousands of workers to meet international creditor demands. "I want to repeat that we will be unswerving in our goal -- to fulfill all that we have promised to ensure the credibility of our country," Prime Minister George Papandreou told an extraordinary Cabinet meeting Sunday to approve a 2012 draft budget as well as the job-cut plan, which calls for identifying about 30,000 public workers who will be put on reduced pay and then either retire early or be fired. The draft budget includes about $8.8 billion in new austerity measures, which Greece agreed to take this year and next to bring its budget back on track. The budget was to be introduced in Parliament Monday and voted on by the end of the month. The job-cut plan, to be carried out immediately, is projected to save $400 million starting next year and is the first step in a plan to eliminate 100,000 public-sector jobs by 2015, government officials said. About two-thirds of the workers put into the special reduced-pay labor reserve will be taken from employees within a year or two of retirement, the officials said. Finance ministers of the 17 countries that use the euro as their currency were to meet in Luxembourg Monday to discuss Greece's reform progress. Greece's Finance Ministry said after the Cabinet meeting Greece's deficit this year would be about 8.5 percent of gross domestic product, or about $25.2 billion, compared with its 7.6 percent target, or about $22.8 billion. Greece's 2012 deficit target is 6.8 percent of GDP, or about $19.5 billion. The European Union, International Monetary Fund and European Central Bank -- known collectively as the troika -- had called for the deficit to be 6.5 percent of GDP. The finance ministry said the missed target was a result of a deeper-than-expected recession. Greece's economy is forecast to shrink 5.5 percent this year, deeper than the 3.8 percent the EU and IMF forecast in May, the ministry said. The deficit could get even worse this year if the new austerity measures are not all implemented, it said. "The final estimate for a deficit equal to 8.5 percent of GDP can be achieved if there is a proper response by the state authorities and the citizens themselves, on whose stance the country's financial ... and social future depends," the ministry said in a statement. In the past few weeks, Greece has seen almost daily work stoppages by groups ranging from doctors and teachers to taxi owners and bus drivers, The Wall Street Journal reported. Public-sector employees planned a nationwide strike Wednesday, and Greece's two largest umbrella unions planned a 24-hour general strike Oct. 19.