Greek officials held talks on Saturday with European Union and International Monetary Fund negotiators to free up urgently needed bailout loans, but the government and the lenders were reported to be at odds over how to meet a promise to lay off state workers.

Without a deal to release EUR 8 billion tranche of an EU bailout, massively indebted Greece could run out of money to pay state wage bills within weeks.

To secure the bailout, the Greek government has promised to impose tax hikes, slash public sector wages by an average of 20% and cut the number of state workers by a fifth by 2015.

Greece has promised to start layoffs by putting 30,000 state workers in a reserve by the end of this year. Workers in the reserve would be paid 60% of their salaries for a year and then be dismissed if they cannot find new jobs. The government has yet to give details about how it would decide which workers would be shunted into the reserve.

The Greek constitution guarantees jobs for life to all state employees, making the promise to cut payroll numbers a legal and political minefield.

European officials are scrambling to avert a Greek debt default, which could wreck balance sheets of European banks, damage the prospects of the euro single currency and possibly plunge the world into a new global financial crisis. Negotiators from the IMF, EU and European Central Bank, known as the troika, left Greece a month ago saying they were not convinced Greece could carry out the necessary spending cuts and tax hikes. The negotiators returned last week after getting written assurances that the government would implement the measures.

(Sourced from chinapost.com.tw)