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Greece Unites On New Austerity Plans

by Ulrika Lomas,, Brussels

23 October 2012

Greek politicians have reportedly united on a new austerity package totalling around EUR13.5bn (USD17.6bn) and containing expenditure- and revenue-based measures.

The government has also submitted a radical bill to lawmakers designed to up the ante in the fight against tax evasion in order to recover much-needed lost revenues for the debt-ridden state.

The savings package agreed with the Troika, comprising representatives of the European Union, the European Central Bank, and the International Monetary Fund, is a prerequisite for further financial assistance. The proposals are said to include changes to pensions, cuts in public sector wages, as well as plans to increase the tax burden, above all on self-employed workers in Greece.

Under the plans, Athens reportedly plans to ensure that no one in the public sector earns more than EUR1,900 in gross income a month. The government also plans to increase the pension age by two years to 67, and to cut administrative jobs in the education sector.

Determined to clamp down on rampant tax evasion and to recover lost tax revenues, reports say that the Greek finance ministry has submitted a bill to parliament providing that senior finance officials are to be made redundant and a new leadership team selected by the Greek finance minister put in place. Tough conditions will be attached to employment contracts and the length of employment is to be limited. A review is to be carried out every three months to ensure that revenue targets are being met. Failure to achieve these targets may result in dismissal.

Other issues, notably as regards extended working hours, have yet to be agreed.

TAGS: compliance | tax | pensions | tax compliance | tax avoidance | public sector | law | employees | Greece

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