The Papandreou government has announced a thid round of austerity measures which are designed to meet European Union demands for savings.
The additional fifteen austerity measures are designed to rein in the Greek budget deficit and secure European financial support.
The measures are split between 2.4 billion euro in new revenues like taxes and levies and another 2.4 billion euro in spending cuts.
The key austerity measures include;
- A 30-percent cut in their holiday bonuses for civil servants
- Tax hikes of two percentage points are imposed on fuel, cigarettes and value-added tax, up from 19 percent to 21 percent
- A special tax on luxury goods such as cars of a value of more than 35,000 euros
- A tax of one percent of revenues of Greeks who earnt more than 100,000 euros in 2009 and a 45 percent tax on revenues above 100,000 euros that will be declared in 2010
- A luxury goods tax on luxury items such as cars of a value of more than 35,000 euros, as well as yachts and helicopters
- A freeze onpension
- 500 million euro cutback in public infrastructure spending
After briefing the Greek President Karolos Papoulias on the measures, the Greek Prime Minister George Papandreou said tough decisions were being taken at a difficult time for the country and Greece is expecting “European solidarity.
“These are hard times, but what we have decided is necessary. We took tough decisions in a difficult situation,” Papandreou said. “We are showing that Greece and the Greek people can responsibly take decisions.”
“We justly expect European solidarity, and that is the other side of this deal,” said Papandreou, referring to his bid for support from other European Union countries.
The leader of New Democracy Antonis Samaras voiced strong disagreement on Wednesday with the additional austerity measures that were announced by the government earlier in the day.
“These measures damage and paralyze the social fabric. They will lead to further stagnation and weaken the purchasing power of households of low incomes” Samaras warned, criticizing the Papandreou government of wasting precious time by inaction.
Acknowledging that the previous New Democracy government had made mistakes, Samaras asked the current Prime Minister to leave the past behindand focus on the present and the future.
“The government’s indecision cost us already more than 300 million euros in increased interest rates of loans,” Samaras noted.
The main opposition party rejects the increases on the goods and services tax, fuel taxes and decreases of the 14th salary and allowances of public servants.
It proposes a further hike on taxes of alcohol and cigarettes, luxury goods, a better management of public estate property, as well as policies that lead more quickly towards growth and development and focus in the tourism and shipping sectors.
“The government is bent on the pressures of the ‘sharks’ of international markets and Brussels, but we will not follow into these steps,” the head of the main umbrella union of private sector employees GSEE Giannis Panagopoulos commented, after key social and union bodies met with Greek Prime Minister George Papandreou on Wednesday afternoon.