The European Commission has said Greece's budget deficit plans are now on track, following the Greek government's announcement on Wednesday (3 March) of fresh austerity measures worth €4.8 billion.
Athens presented its budgetary plan - known as a 'stability programme' - to the commission in January, in which it pledged to reduce its budget deficit by four percent of GDP in 2010. After a three-hour cabinet meeting on Wednesday morning, Greek government spokesman Giorgos Petalotis said the agreed new measures amounted to €4.8 billion, split between €2.4 billion in new revenues and €2.4 billion in spending cuts.
- They include a dramatic 30 percent cut in the holiday bonuses of Greek civil servants.
- The plans also include a 12 percent cut on other civil servant bonuses, a freeze on all pensions, a 2 percent rise in the VAT rate to 21 percent and a 20 percent increase in the tax on alcohol and tobacco, as well as an 8 cent-a-litre increase in the price of petrol.
- There are also plans for a tax rise on luxury goods such as expensive cars.
In return for the fresh austerity measures, Greece is hoping for greater details of a bailout plan to be made public, a step which Athens argues will bring down its borrowing costs. Euro area states have so far resisted however. Greek hopes have recently centered on a meeting between Mr Papandreou and German chancellor Angela Merkel this Friday, but a German official said on Wednesday that Berlin would not offer financial aid to Greece at the meeting.
Euobserver
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