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Greece Faces Bailout Review, Plays Down Public Sector Job Losses

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Officials from the EuropeanUnion and the International Monetary Fund return to Athens onSunday to assess Greece's performance under a bailout plan asthe government plays down the prospect of public sector jobcuts.

The heads of the "troika" mission from the EU, IMF and theEuropean Central Bank will meet Finance Minister YannisStournaras to review progress on privatizations, taxadministration reforms, bank recapitalization and steps toshrink the public sector.

International lenders unlocked aid in December afterGreece's coalition government adopted austerity measures tobring the bailout plan back on track, with Athens aiming for aprimary budget surplus this year for the first time since 2002.

Greece's euro zone partners and the IMF have urged strictadherence to the plan to shore up public finances, a line echoedby the head of the Euro Working Group of senior officials whoprepare decisions of euro zone finance ministers.

"All that was agreed in the bailout plan must beimplemented. These reforms were agreed to make the Greek economystronger, flexible and more competitive," Euro Working Groupchief Thomas Wieser told Greek newspaper Realnews.

In its sixth year of recession, Greece has agreed to shrinkits public sector by 150,000 by 2015 to cut its wage bill,mainly through attrition: hiring one new person for every 10 whoretire.

Athens wants to avoid public sector layoffs withunemployment already at a record 27 percent and likely to riseas the economy is projected to shrink 4.5 percent this year.

But the government must transfer 25,000 employees to aso-called mobility scheme by the end of this year, where workers will earn reduced pay for a year and may face layoffs if vacantspots are not found in the broader public sector.

Finance Minister Stournaras played down talk of imminent jobcuts in comments to Sunday's To Vima newspaper: "The publicsector has shrunk by 75,000 people in the last one and a halfyears, there will be no layoffs," he was quoted as saying.

Bank recapitalization will be another topic on the agenda.Bankers have asked for an extension to an end-April deadline towrap up a scheme to restore the solvency of the country's fourbiggest lenders.

Inspectors will also review steps taken to addressshortcomings in tax collection and fighting tax evasion, andprivatizations.