Reuters: Greece sharpens austerity measures

21 September 2011

Greece adopted yet more austerity measures on Wednesday to secure a bailout instalment crucial to avoid running out of money next month.

The Greek cabinet agreed to cut high pensions by 20 per cent, put 30,000 civil servants in a "labour reserve" on a road to redundancy, lower the income threshold for paying tax, and extend a real estate tax, a government spokesman said. "The measures taken today allow us to comply with the bailout plan through 2014", the spokesman, Ilias Mossialos, said.

The new package is designed to ensure Greece receives a €8 billion rescue loan vital to pay state salaries and bills in October. Senior European Union and International Monetary Fund officials are to arrive in Athens early next week to review progress, Mossialos said. Greece is on the front line of the eurozone debt crisis that has engulfed Ireland and Portugal and now threatens Italy, Spain and some of Europe's biggest banks, risking plunging the West back into recession.

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