EUROZONE : GREECE PLEDGES NEW BUDGET CUTS TO SECURE AID.
Greece has outlined a series of new austerity measures designed to secure it a lifesaving tranche of aid from its EU and International Monetary Fund donors and keep it inside the eurozone. After a cabinet meeting, on 21 September, a spokesman for the Greek government said that the cuts would send "the message that Greece both wishes and is able to fulfil its obligations, always remaining at the core of the eurozone and the European Union".
The measures include a lowering of the taxable income threshold to 5,000, bringing more people into the tax net; an overhaul of pay and benefits in the public sector; cuts to public sector pensions above 1,200 a month and for people retiring before they are 55; the slashing of 30,000 public sector jobs, placing the sacked employees in a labour pool; and promises to speed up privatisations, the liberalisation of closed professions and overhauling tax collection.
A troika of Commission, European Central Bank and IMF officials left Athens earlier this month after it emerged Greece would not be able to meet a 7.5% of GDP deficit target this year because of lower than expected growth. Finance Minister Evangelos Venizelos later announced the government would bring in an emergency real estate tax to collect an extra 1.7 billion to fill the gap.
Greek public sector workers staged a 24-hour strike, on 22 September, against the cuts, which have battered the economy, which has shrunk by over 13% in the last three years. The government needs to secure the 8 billion payment, its sixth under last May's 110 billion bailout, in order to pay off debts maturing in October and November. The EU's finance ministers have said they could hand over the aid by the middle of next month.
Troika officials are due to return to Athens at the beginning of next week, the Greek finance minister said, after continuing talks with the Greek authorities in Washington, where leaders and finance ministers are gathering for the IMF and World Bank meetings.