20th Aug 2022

Greece readies fresh round of austerity worth €25bn

The Greek government is readying a raft of fresh austerity measures aiming to raise some €25 billion over the next four years.

According to Greek daily Kathemerini, the measures will focus on tax hikes rather than cuts to social services this time, with an increase in road tax, the extension of excise duties to non-alcoholic beverages and a boost in the VAT rate from 13 percent to 23 percent on certain items.

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  • The fresh measures will include increased taxes on consumption (Photo: John D. Carnessiotis, Athens, Greece)

A number of public bodies will be closed down and a restructuring of wage frameworks in the civil service will be ramped up.

However, public sector wages and pensions will see no further reductions.

A detailed announcement is expected sometime before 15 April. The additional austerity measures aim to bring the country's deficit to below three percent of GDP, as required under the terms of a €110 EU-IMF bail-out.

The move comes atop a separate round of privatisations of state assets including real estate that the government hopes will raise €50 billion in new money.

Meanwhile, the head of the International Monetary Fund, Dominique Strauss-Kahn has rubbished claims that his organisation backs a restructuring of Greek debt.

Over the weekend, Der Spiegel reported that the international lender was pushing Athens to accept some form of restructuring, with the scale of its debt pile increasingly viewed as unmanageable despite the EU-IMF bail-out.

"We are supporting the Greek government in its position that it doesn't want a restructuring of the debt," he said at an event in Washington, agencies report.

Representatives of the IMF, the European Commission and the European Central Bank arrived in the Greek capital on Monday for the latest check-up on the state of the country's efforts to meet budget targets.

Separately on Monday, Portugal saw the yield on its five-year bonds climb to 9.91 percent, a rate above that experienced by Ireland ahead of its bail-out last November.

Conditions met for German nuclear extension, officials say

Conditions have been met for the German government to allow a temporary lifetime extension of three remaining nuclear reactors, according to the Wall Street Journal, as the country is facing a likely shortage of gas this winter.

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