Greece Lost Measure with Austerity Measures – New €7b Package Tabled in Washington tagged: , , , , , ,

Greece Lost Measure with Austerity Measures – New €7b Package Tabled in Washington

Posted by keeptalkinggreece in Economy

 Greece’s Finance Minister Evangelos Venizelos must be out of his mind. The IMF too. Then Venizelos put on the Washington table a new €7 billion package of  measures that contain the usual easy solutions: Wages and pensions cuts, retrospective tax allowances cuts. Sunday edition of Proto Thema newspaper had even claimed that there were thoughts of taxing at up to 50% the 10% tax on interest rates from people’s savings. Also to impose a special contribution to doctors, lawyers and engineers.  The tabled package contains some of the measures already announced last week and of course additional ones.

The problem is, we lost the measure with the measures… They are imposed in real fast track, in per-week-speed… Needless to say that the new package contains ZERO measures for development and growth! Just dumping lives and dignity….

 Here is the package:

Greek Finance Minister Evangelos Venizelos presented a package of measures at a meeting of the International Institute of Finance, including retrospective cutting of tax allowances, extension of 1 recruitment to 10 redundancies ratio, cutting of wages by 20% and pensions by 4%. 

The measures were discussed in detail in prior meetings between Venizelos, foreign FinMins, IMF and EU officials. The final package is not finalized yet, as there are reportedly still differences in 2012 estimates. 

Discussions will continue in Athens, while the Troika senior officials should begin negotiations on Wednesday, according to initial schedule. However, the IMF announced that the Troika would return to Athens most likely this coming week, without specifying the exact date.

According to an announcement made by the Minister of Finance, additional measures of another 3% of GDP were adopted including: 

-A further reduction by 20% in the public sector salaries (additional to the 15% already implemented for the civil service and the 25% cuts in the public enterprises). These wage cuts are combined with a structural change in the public sector wage grid that ensures long-term savings and public sector productivity improvements.

-A further 4%, on average, cut in pensions (additional to the 10% already implemented). These cuts are complemented by a completion of the pension reform (via reforming also the supplementary pension funds) that ensures long-term viability of the Greek pension system.
-The creation of a labour reserve to which 30 thousand public sector employees will move by the end of 2011.
-The application of the rule of one recruitment for every ten retirements for the duration of the Medium Term Fiscal Strategy.
-Significant tax expenditure cuts of 0.6 percent of GDP implemented retroactively from January 2011.
-The introduction of a property tax to be collected via the electricity bills mechanism with an annual yield of 1.1 percent of GDP for the duration of the Medium Term Fiscal Strategy.

On the privatizations front, the September 2011 target is €1.7 billion. This target will be reached within October with the €1.4 billion to be reached within September. By the end of 2011 we expect to have collected from privatisations €4 billion. All privatization programmes for the period up to 2014 mature in order to move more swiftly, now that the Privatizations Fund is up and running within a framework of total transparency and consensus.

source: Capital.gr