1. Greece to adopt more cuts, tax hikes for bailout cash

Greece to adopt more cuts, tax hikes for bailout cash

Greece today was set to adopt fresh cuts and tax hikes ahead of a Eurogroup meeting that is expected to unlock desperately-needed bailout funds for the debt-ridden nation.

By: | Athens | Published: May 22, 2016 9:43 PM
greece bailout Greece has pledged under its latest EU bailout to bring its primary budget surplus, which excludes debt payments, to 3.5 per cent of gross domestic product by 2018. (Reuters)

Greece today was set to adopt fresh cuts and tax hikes ahead of a Eurogroup meeting that is expected to unlock desperately-needed bailout funds for the debt-ridden nation.

After waves of protests over a string of unpopular reforms, lawmakers from the ruling leftist party are to approve today night a bill of over 7,000 pages that raises the sales tax cap and introduces a mechanism to slash spending further in case of budget overruns.

The contingency mechanism in the new legislation — labelled “the cutter” by Greek media — is designed to cut state spending if the country fails to meet fiscal targets, is of chief interest to Greece’s international creditors.

Greece has pledged under its latest EU bailout to bring its primary budget surplus, which excludes debt payments, to 3.5 per cent of gross domestic product by 2018.

Should Athens fail to reach its fiscal targets, it must resort to the new mechanism to save up to two percent of output in a fiscal year.

People on all sides of Greece’s political divide have criticised the sweeping reforms, the latest in a string in recent years.

Earlier this month, tens of thousands took to the streets to protest against an equally unpopular pension reform and tax hike.

Today, more than 2,000 people had gathered outside the Greek parliament protesting against the new measures, Greek police said.

Public transport has been at a standstill all weekend after main unions called a strike.

“No one in Greece will remain unaffected by the typhoon of the new measures”, Kyriakos Mitsotakis, the leader of New Democracy main opposition party said today speaking in the Greek parliament.

“Employment is punished, property is prosecuted”, he added.

Greek newspapers today voiced criticism over the fact that the new taxes and cuts, which also include a maximum VAT hike from 23 to 24 percent, don’t come with a promise from the country’s international creditors of debt relief.

“It’s raining taxes, with the future of debt uncertain,” read the headline of Kathimerini newspaper’s top story.

Greece and its European creditors are locked in talks on how to reduce the country’s debt burden, which the International Monetary Fund said must happen if it is to contribute any more of its own funds.

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