Greece’s Economic Woes Lead to Partial Loss of 30,000 Jobs

30,000 government workers in Greece will be placed on “labor reserve” in 2012 where they will earn partial pay while being laid off from their current positions. According to a deputy minister for the Greek cabinet ” “The labor reserve measure was approved unanimously.”

News of the massive layoffs comes as the country’s deficit grew to 8.5 percent of the GDP in 2011, an amount equal to €18.69 billion ($25.2 billion). Officials had hoped to keep the deficit to just €17.1 billion ($23.1 billion), an increase of 7.8 percent.

The country’s deficit this year is expected to reach 8.5 percent of gross domestic product, or €18.69 billion ($25.2 billion) — higher than the targeted €17.1 billion ($23.1 billion), which would have been 7.8 percent of GDP, the ministry said.

Leaders in the country blame the higher than expected deficit on a contracting economy while lenders to the country blame the countries much needed structural changes.

Greek officials hope to turn around their deficit in 2012 with a projected loss of €14.68 billion ($19.82 billion), an amount equal to 6.8 percent of the GDP, 0.3 percent higher than lenders would like.

Speaking of the proposal spokesman Elias Mossialos said:

“The approved proposal is the result of lengthy and difficult negotiations with (the lenders) who insisted that placing employees on reserve should have been a step towards firing them and not an early retirement” program.

Do you think the Greek cabinet can turn things around based off their current plan or will they need to develop a more refined economic plan that encompasses more than just a handful of layoffs.