A new round of austerity measures were announced by the Papandreou government as it tabled its draft 2011 budget in the Greek Parliament on Thursday.

The budget includes 14 billion euros of spending cuts and revenue measures, almost double those contained in the draft budget released in October.

The new round of measures became necessary when the deficit figure for 2009 – the starting point of Greece’s arduous austerity effort – was revised upwards earlier this week to 15.4 per cent of GDP from the previous 13.6 per cent by Eurostat, the EU statistics agency.

The resulting effect is that the 2010 shortfall will now be 9.4 per cent of output, above the 8.1 per cent target that Greece agreed to with the European Union and the International Monetary Fund.

Amongst the measures announced by the Greek Finance Minister George Papaconstaninou are increases in the Greek consumption tax, a nominal freeze in pensions as well as cuts in spending on health care, pharmaceuticals and defence.

The budget increases the higher rate of consumption tax from 11 per cent to 13 per cent and the lower rate of consumption tax from 5 per cent to 6.5 per cent — although VAT in the vital tourist industry and pharmaceuticals will be cut to 6.5 per cent from 11 per cent.

The cost of oil for heating has also been increased.

The measures contained in the draft budget also proposes cuts in operational and wage costs at loss-making state-run enterprises, health care and defence.

Specifically, it aims to save 2.1 billion euro in the health sector by reducing spending on medication and procurement, 800 million euro from public corporation restructuring and to cut 500 million euro in defence spending.

It also says it will save 100 million euro by not renewing contracts for 10,000 short-term public sector workers. Pensions and wages will remain frozen.

Other measures announced in the budget include a reduction in the tax on non-distributed corporate profits to 20 per cent from 24 per cent and an extension in the amnesty on the payment of outstanding tax debts.

Although he stressed it was not the government’s aim to cut public sector jobs, the Greek Finance Minister George Papaconstantinou implied it was a possibility.

“To reduce the deficit in a state enterprise, you either have to increase revenues or reduce costs,” he said, adding that there were five such companies where payroll costs exceeded revenue.

Budget forecasts estimate that unemployment in Greece will run at more than 14 per cent over the next two years.

An audit of Greek finances by the EU, the IMF and the European Central Bank is currently being undertaken and it is expected to be completed on Monday.

Provided the IMF-EU-ECB auditors give the green light, EU finance ministers would in turn decide on releasing the funds in mid-December, with the transfer coming in January.

The IMF is expected to disburse its 2.5-billion-euro share of the 9 billion in December.

ADEDY, the largest public-sector union, said it will stage a 24-hour nationwide strike on December 15 to protest the measures, joining a strike already called by the General Confederation of Labor, or GSEE, Greece’s largest private industry union.

ADEDY will also hold a three-hour work stoppage on November 25, spokeswoman Despina Spanou said.