The Greek Cabinet has approved a draft 2012 budget that includes a provision to eliminate 30,000 government jobs by the end of next year.
Officials have not released details of the plan, including who would be laid off. The entire budget package will be sent to parliament on Monday.
Also Sunday, the Finance Ministry said the Greek budget deficit will hit 8.5 percent of gross domestic product this year — missing the European Union and International Monetary Fund’s target of 7.6 percent. The ministry projects a 6.8 percent deficit for 2012, still short of the 6.5 percent target. It blames the missed targets on a deeper than expected recession.
Greece is struggling to prove to its lenders that it is cutting spending and raising revenue so that it can secure a $10 billion installment from last year’s bailout. Greece says it will default on its loans if it does not get the money.
A Greek default could have devastating consequences for the European Union and U.S. economies.