As politicians in the US debate the merits of smaller government, Greece's creditors are forcing it to shrink its public sector. Greece has agreed to cut 15,000 government jobs by the end of this year, and 150,000—a fifth of the total—by the end of 2015. Greece's constitution protects public sector workers from being fired, so the cuts will have to come from forced retirements, and from the shrinking or even elimination of some public sector entities, the New York Times notes.
Without the job cuts and other austerity measures, including a 20% pay cut for public sector workers, the IMF and Greece's eurozone partners are threatening to withhold a $171 billion bailout loan, without which Greece will default on existing loans. The creditors want all three of Greece's major parties to agree to a deal now to prevent backsliding after elections this spring. News of the job cuts was greeted with yet more unrest on the streets of Athens, and the country's two major umbrella unions declared a nationwide general strike. Riot police fired tear gas to repel hundreds of anti-austerity protesters trying to break a cordon outside Parliament, but no arrests or injuries were reported and the clashes quickly subsided. Police said some 10,000 people took part in an otherwise peaceful march to Parliament under heavy rain; a separate demonstration by about 10,000 Communist unionists ended without incident. (Read more Greece stories.)