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GREECE WILL SUSPEND more civil servants than originally planned and impose new pension cuts as part of more austerity measures, the government said today, as it tried to persuade international creditors to continue bailout payments needed to avoid a chaotic default.
Government spokesman Elias Mossialos outlined the new spending cuts after a six-and-a-half hour Cabinet meeting, the outcome of which was being watched closely by nervous global markets.
“This choice sends a message to our partners and the markets that Greece both wants and is able to fulfill its commitments and remain at the core of the eurozone and the EU,” Mossialos said in a statement.
The new measures include increasing the number of civil servants to be suspended on partial pay to 30,000 by the end of this year from 20,000. Mossialos said this amounted to a total of about 3 per cent of public sector staff.
Greece has been under pressure from its international lenders to meet fiscal targets and slash the size of its bloated public sector. The country has more than 750,000 staff in the country of 11 million people.
Under the new measures, monthly pensions above €1,200 will be subject to a 20 per cent cut of the amount above the €1,200 threshold, while pensioners below the age of 55 will see a 40 per cent cut in the amounts of their pensions above the €1,000 limit.
The tax-free limit on annual income will drop to €5,000 from €8,000 and the cut will be applied to this year’s income, Mossialos said.
“It is the fundamental and strategic choice of the country to return to fiscal independence as an equal member of the eurozone, achieving a primary surplus as soon as possible,” he said.
Strikes continue
The prospect of more tax increases and spending cuts are likely to be met with mounting concern in a country mired in a deep recession and with the number of unemployed rising to around one in seven. Greece’s two largest labour unions already called earlier today for another general strike on October 19. All public transport in the capital will halt tomorrow as transport workers hold a 24-hour strike.
Greece has been dependent since last year on rescue loans from a €110 billion bailout extended by other eurozone countries and the International Monetary Fund to prevent it from defaulting on its debts. The country undergoes a quarterly review by the IMF, European Central Bank and European Commission, known collectively as the Troika, to ensure it meets its targets before each loan disbursement.
But the troika suspended its last review earlier this month amid talk of delays and missed targets. Finance Minister Evangelos Venizelos held two nights of conference calls with the heads of the delegations Monday and Tuesday, and the troika is due back in Athens to complete its review next week.
Default?
Unless they sign off on the next €8 billion batch of loans, Greece will default on its debts in mid-October.
The announcement of the new measures came after Venizelos briefed Parliament on the results of his conference calls with the troika.
The government will also speed up privatizations, and reforms opening up closely regulated professions to more competition – both areas for which the country has come under criticism by its lenders for delays.
Earlier this month, the government had already announced a new property tax in a hurried attempt to plug a budget gap. The new tax will be paid through electricity bills to make it easier for the state to collect, but the plan could run into problems as the power company union has threatened to refuse to collect the money.
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What’s that rushing up towards me, said Rosetta. I shall call it “rocks” it thought happily – I wonder if it will be my friend?
Who is flying it, Mmmmm……it would be too much to hope for, by the way is leaders questions on this morning.
They better be friends. They’ll probably be together for billions of years.
Per second? Wow! That’s fast..
@The Girl:
Approx. 30,000 mph
Sure the Earth is going at 30km per second, and rotating at 1,000mph at the equator.
True, the earth orbits the sun at about 108,000 km/hr. And all without spilling your tea. ☺
Has to be 14km per hour, the speed of a gentle amble
Don’t forget that the Milky Way itself is driving along at 1,300,000 mph. It’s all very interesting really!
@Elma Phudd: so in other words if I walk forwards I am travelling at 1.3m mph + 108k mph + 1000 mph (if at the equator) + whatever speed I am doing :-). Like a fly in a car (doing 90) flies from the back to the front inside the cabin. Is he doing the 90+fly speed or jsut fly speed :-)
It depends which direction you are walking in ;)
You only don’t spill your tea because the brakes have been sabotaged by the illuminati to stop anyone getting off and away from the crazyness.
Whenever life gets you down, Mrs. Brown, And things seem hard or tough, And people are stupid, obnoxious or daft, And you feel that you’ve had quite eno-o-o-o-o-ough, Just remember that you’re standing on a planet that’s evolving And revolving at 900 miles an hour. It’s orbiting at 19 miles a second, so it’s reckoned, The sun that is the source of all our power. Now the sun, and you and me, and all the stars that we can see, Are moving at a million miles a day, In the outer spiral arm, at 40,000 miles an hour, Of a galaxy we call the Milky Way. Our galaxy itself contains a hundred billion stars; It’s a hundred thousand light-years side to side; It bulges in the middle sixteen thousand light-years thick, But out by us it’s just three thousand light-years wide. We’re thirty thousand light-years from Galactic Central Point, We go ’round every two hundred million years; And our galaxy itself is one of millions of billions In this amazing and expanding universe.
A truly incredible and inspirational program from start to finish. What they’ve achieved is astonishing!
Everything that lives is born to die…….even spacecraft!
Lets hope Rosetta’s impact doesn’t nudge the comet off its trajectory and send it spiraling towards earth.
It’s going the wrong direction and there’s not going to be much force from the landing! The momentum of the comet probably won’t be affected by the satellite crashing into it.
bags summa dat metal dere boss
Were any of the scientists wearing sexist clothing during the announcement? Because that’s what really matters here.
All that technology and it took them ages to find Osama Bin Laden.
Why crash it though? Why not just let it drift off into the abyss?
Litter bug!
@OU812: They hope to obtain useful data from the crash landing. They’d get none if they let it drift.
And it was on its last legs….
This way they know where it is: drifting it’d be a hazard to the next one up?
Fantastic and another European victory in the friendly space race between the USA and Europe/Russia…hopefully much more can be invested in Space exploration.
Rosette are you better, are you well well well
We should all be glad that we managed to land on a comet before one landed on us.
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