Desperate to avoid immediate bankruptcy and to get its next instalment of aid money from Europe and the International Monetary Fund, Greece is to speed up the spending cuts agreed for its bailout programme.
Government spokesman Ilias Mossialos said an agreement by the cabinet to front-load austerity measures under the deal would allow Athens to comply with the terms of its bailout through to 2014.
The measures include lowering the tax threshold to income of 5,000 euros a year from the current 8,000 euros.
Pensions of more than 1,200 euros a month will be cut by 20 percent and there will further reductions of pension payments for former state workers who have retired before the age of 55.
The government will also extend a new property tax hike until at least 2014. It was originally due to expire next year.
A total of 30,000 civil servants will be put on what is known as “labour reserve” this year. That means their pay will be reduced by 40 percent and they will be given 12 months to find new work in the state sector or lose their jobs.
The spokesman said Greece will wrap up the review of the bailout deal once inspectors from the European Union and International Monetary Fund return to Athens for talks next week.
Earlier Greek Finance Minister Evangelos Venizelos said: “The country cannot go forward without true implementation of major structural reforms. We have delayed them. We have delayed them and we must finish things and close the file on them.”
The problems is the cuts are pushing Greece deeper into recession. The economy is forecast to shrink by five percent this year, layoffs mean the number of jobless is 16.5 percent of the workforce – with youth unemployment to 40 percent. Athens owes nearly 158 percent of its economic output.
The queues at job centres are due to get longer as Greece is plans to cut the public workforce of 725,000 by a fifth in the next four years.
With the economy in tatters, Greece’s options for raising money are limited and the European Union and International Monetary Fund will have to gamble that Athens really will follow through on its promises this time.
If it does not get the next instalment of rescue cash, Greece will run out of money next month.
Copyright © 2014 euronewsMore about:
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2Sweden becomes first EU country to recognise the Palestinian State | euronews, world news
- 3Italy swamped by flash floods | euronews, world news
- 4Back to School for Romania’s new First Lady | euronews, world news
- 5What will you ask US Senator John McCain? | euronews, world news
- 6Turkish president Erdogan unveils his new palace of a thousand rooms | euronews, world news
- 7India PM Modi appoints Yoga minister | euronews, world news
- 8[Live] Rosetta’s Philae lands on comet 67P and enters the history books | euronews, world news
- 9Vladimir Putin most powerful man in the world – Forbes | euronews, world news
- 10European e-revolution people rise up | euronews, world news
- 11International tv news | euronews: European and International tv news bulletin
- 12Where is the best place in Europe for women? | euronews, world news
- 13Nadia Comaneci: gymnast of perfection and defector | euronews, the global conversation
- 14Putin plans to leave G20 talks early amid Ukraine pressure | euronews, world news
- 15Transcript of hanged Iranian woman’s final message released | euronews, world news
- 16US says ISIL makes $1 million-a-day selling oil – even to enemies | euronews, world news
- 17Syria: Islamic extremists pledge to press ahead with battle for Kobani | euronews, world news
- 18International news | euronews, latest international news
- 19Anti-immigration protests in Rome | euronews, world news
- 20Portugal: Ex-PM José Socrates held in corruption probe | euronews, world news
Wires > Business
- 09:25 CET Sweden’s Wallenberg dynasty prepares for sixth generation
- 08:09 CET Putin stands by hawkish Russian central bank – for now
- 20:17 CET Aviva says will compensate customers sold wrong annuities
- 18:53 CET Aviva sold inappropriate pensions – Telegraph newspaper
- 18:43 CET Albanian opposition rallies against tax, power burden
- 16:07 CET SGL says in talks with many carmakers to supply carbon fibre parts
- 15:55 CET Swiss agency has more queries over Etihad plan to buy Darwin stake
- 15:30 CET Europe not at risk of full-blown deflation – ECB’s Constancio