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Greece's doctors to get dose of austerity medicine

Doctors on strike in Athens
Louisa Gouliamaki | AFP | Getty Images
Doctors on strike in Athens

For the first time since it crashed into crisis in 2010, the Greek parliament is meeting amid some rare signs of good news when it discusses the country's budget Wednesday.

The country's government is forecasting a primary surplus of at least 800 million euros ($1.1 billion). Meanwhile the economy is predicted to show growth, albeit meek, of 0.6 percent and the country's sky-high unemployment rate of 25.5 percent for 2013 is set to fall to about 24.5 percent for the next year.

Greece has been relying on 240 billion euros in emergency loans from its fellow euro countries and the International Monetary Fund since 2010 when it could no longer afford to pay its own way on the international markets. However, with these loans came strict conditions on spending and reforms which have left Greece's economy foundering.

(Read more: Moody's upgrades Greece's debt rating)

For the first time since the loans, there is no mention of across-the-board austerity in the 2014 Greek budget – in defiance of what the country's international lenders are asking for. The so-called "Troika" of international inspectors -- the European Central Bank, European Commission and IMF -- cancelled its visit to Greece this week over disagreements on the country's ability to include more spending cuts and tax rises in the budget and the expected fiscal gap for 2014.

Sticking points remain in the negotiations on issues like foreclosures on first homes for people who can't pay their mortgage, and civil servants lay-offs. The current impasse could mean Greece will not get its last tranche of aid for the year – some 1 billion euros – in time.

"Progress is being made but there remain a number of open issues which require further work. Close and constructive contacts with the Greek authorities are continuing in this context from headquarters. Staff teams will return to Athens in due course but this is not expected to be before the Eurogroup of 9 December", Simon O'Connor, European Commission spokesperson for economic and monetary affairs told CNBC.

(Read more: Troika set to get tough over Greece budget shortfall)

The Greek government finds itself in a hard balancing act to satisfy both its creditors abroad and the electorate at home. Instead of deep across-the-board austerity measures such as wage and pension cuts, the 2014 budget targets its cuts on specific parts of the Greek welfare state – such as healthcare. This is causing widespread social unrest in the debt-hit country. A mass demonstration from the General Union of Workers (GSEE) has been planned for Saturday, the day of the vote at Syntagma Square.

Greek doctors have been on strike for more than a week, as austerity is about to hit the health sector. Their protest is against a suggestion to revamp the national health agency EOPYY is set to continue until December 13th, public health workers announced this week.

Doctors will come under the much contested "mobility scheme" which bears the risk of them losing their jobs after eight months. The Troika is asking Greece to put 12,500 civil servants under the mobility scheme for the next round of the public sector's reduction. George Eleftheriou, head of the EOPYY doctors' union, says the government is include 10,000 health service staff in the mobility scheme and that at least 2,500 jobs will be cut at the end of the eight-month process.

(Read more: Greece's emerging market status: Good news really?)

The president of EOPYY Dimitris Kontos admits that there will be doctors going under the mobility scheme, as the government is planning to cut some of the over thirty medical specialties that are now available through the primary health system. "I invite all doctors to come to discussion with us to look for common solutions to find alternatives for them, jobs in hospitals or in private practices contracted to EOPYY", Kontos told CNBC.

"The mobility scheme is the tool that the Greek government has in hand in order to make changes and it has already been used for a lot of civil servants. I really think that our doctors don't want to tell the Greek people that they want to be exempt from a measure that is being applied to the rest of the civil sector", Health Minister Adonis Georgiadis told reporters in Athens.

EOPYY is a single national health insurer that was set up by law in 2011 and came into force on January 1st 2012. Until then, different professionals belonged to different state insurance coffers. All of these coffers were deeply indebted and EOPYY took on all the debt.

The 2014 budget proposes a reduction of 2.18 billion euro for EOPYY's income in relation to 2013. The president of the agency, Dimitris Kontos, says this reduction is not as high in reality, as last year they had to take extra funding of 1.77 billion euro to service debts that were due before the end of December 2011.

The government's subsidy to EOPYY for 2014 will be 774 million euro; 43 million less than the initial amount agreed for 2013. EOPYY owes to third parties around 1,8 billion euro, while it still owes hospitals 1,15 billion for hospitalisation costs. The organisation will try to curb excessive spending and clamp down on superfluous demand, says Kontos.

The primary healthcare committee of the Ministry's Health in Action initiative, with the support of the EU Task Force for Greece suggest that EOPYY turns into a buyer of health services, instead of an actual health provider.

"This will alleviate some of the financial burdens and take off some of the work load from EOPYY", the committee's chair Dr. Pavlos Theodorakis says.

The main points of the Health Ministry's restructuring plans for EOPYY will be presented to the relevant parliamentary committee Wednesday and the final proposal will be ready by the end of the week.

Clarification: This article has been updated to include the latest end date for the Greek doctors' strike.

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