Papandreou Not Considering Resignation Over Greek Crisis, Spokesman Says

Greek Prime Minister George Papandreou isn’t considering resigning, said a spokesman from his office in Athens.

The spokesman, who declined to be named, denied a report in the Financial Times Deutschland saying Papandreou has twice spoken about his resignation with confidants in the past three weeks. Both times Papandreou offered his resignation yet continued working, the newspaper said, citing people familiar with the matter.

Papandreou’s government yesterday submitted a 2012 budget with 6.6 billion euros ($8.7 billion) of savings, including a second round of pension and wage cuts to bring the 2012 deficit to 6.8 percent of gross domestic product as the country moves closer to securing an 8 billion-euro aid payout needed to avoid default.

Greece is rushing to meet demands amid doubts from partners it is doing enough to receive the sixth payment of loans under a May 2010 European Union-led bailout. As Papandreou fights investor doubts and domestic protests, European leaders are squabbling over the terms of a July 21 agreement for more financing for Greece to keep it shielded from markets and the prospect that they will be forced to channel more money to keep Greece in the currency union.

Austerity Measures

Papandreou adopted the austerity measures under pressure from the EU, International Monetary Fund and European Central Bank as the country’s three-year recession sapped the revenue needed to close the fiscal gap just two months after he pushed through a five-year 78 billion-euro package of budget cuts and state asset sales to receive a fifth loan payment in June.

This year’s austerity measures allow for dismissal of state workers, a first for the country. The government by December will identify 30,000 public workers who will be put on reduced pay and either retire early or eventually be fired.

The plan aims to save 300 million euros from the government wage bill in 2012 and have drawn renewed opposition from union groups.

“For the first time since the foundation of the Greek state and after a century of struggle, the permanency of civil servants is being abolished in the most inhuman, unconstitutional and illegal manner,” said Athens-based ADEDY, which represents about 750,000 state workers and has called a strike for Oct. 5. The government has decided “to offer up state workers as prey to the country’s creditors.”

To contact the reporter responsible for this story: Maria Petrakis at mpetrakis@bloomberg.net

To contact the editor responsible for this story: Kevin Costelloe at kcostelloe@bloomberg.net

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