How Greek Austerity measures will affect their citizens

As expected, the Greek parliament passes their proposed Austerity measures needed to gain more bailout money, amidst protests by its citizens.  Greek Prime Minister George Papandreou clinched enough votes to pass the first part of a plan aimed at meeting European Union aid requirements and staving off default. After gaining 155 votes in the 300-seat Parliament, Papandreou is on track to secure a bill setting out the strategy for a 78 billion euro ($112 billion) package of budget cuts and asset sales that is the condition for further rescue funds.

Papandreou Wins Budget Vote as Risk of Default Recedes Here are some of the measures taken in taxation and cuts in the public sector, defense and benefits, along with a slew of privatization measures, the government will be taking.

Here are 10 of the most onerous:

  1. Taxes will increase by 2.32 billion euros this year and 3.38 billion, 152 million and 699 million in the three subsequent years. There will be higher property taxes and an increase in the value-added tax (VAT) from 19 percent to 23 percent.
  2. Luxury levies will be introduced on yachts, pools and cars and there will be special levies on profitable firms, high-value properties and people with high incomes.
  3. Excise taxes on fuel, cigarettes and alcohol will rise by one-third.
  4. Public sector wages will be cut by 15 percent.
  5. Defense spending will be cut by 200 million euros in 2012 and 333 million each year from 2013 to 2015.
  6. Education spending will be cut by closing or merging 1,976 schools.
  7. Social Security will be cut by 1.09 billion euros this year, 1.28 billion in 2012, 1.03 billion in 2013, 1.01 billion in 2014 and 700 million in 2015. There also will be means testing, and the statutory retirement age will be raised to 65 from 61.
  8. The government will privatize a number of its enterprises, including the OPAP gambling monopoly, the Hellenic Postbank, several port operations, Hellenic Telecom and will sell its stake in Athens Water, Hellenic Petroleum, PPC electric utility and lender ATEank, as well as ports, airports, motorway concessions, state land and mining rights.
  9. Only one in 10 civil servants retiring this year will be replaced and one in five in coming years.
  10. Health spending will be cut by 310 million euros this year and 1.81 billion euros from 2012 to 2015.


  1. In the 80’s and 90’s he IMF told the Phil. gov’t to get into austerity mode and the strategy instead took us into the throughs of economic disaster…here they are again with Greece…they should dhut their doors!

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