FACTBOX-Austerity measures around the euro zone

July 15 | Thu Jul 15, 2010 8:11am EDT

July 15 (Reuters) - Here are some of the austerity measures implemented by governments in the euro zone:

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For a graphic on European austerity measures, click on:

here

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* ITALY:

-- Prime Minister Silvio Berlusconi's government won a confidence vote on Thursday on the unpopular 25-billion euro ($32.03 billion) austerity package it says will shore up Italy's strained public finances.

-- Although Italy kept its budget deficit down to 5.3 percent of GDP in 2009, well below the EU average, the budget aims to cut the deficit to 2.7 percent by 2012.

Here are some of the measures:

-- Delaying retirement dates by three to six months, a state salary freeze and pay cuts for high public sector earners.

-- Regional and local governments will be pressed to contribute some 13 billion euros of spending cuts in 2011-2012.

-- There will be a 10 percent cut per year in 2011 and 2012 in spending by all government ministries. Provincial governments with less than 220,000 inhabitants will be abolished.

-- Abolition of publicly funded think-tanks, including ISAE, which conducts Italy's consumer and business confidence surveys.

* GREECE:

-- Greek lawmakers approved a pension reform bill which raises the retirement age and curbs early pensions, a key element of an EU/IMF bailout aimed at pulling the country out of a debt crisis.

-- It plans to narrow its budget shortfall from 13.6 percent of GDP in 2009 to 8.1 percent this year, 7.6 percent in 2011 and 2.6 percent in 2014.

Austerity measures include:

-- Public sector pay freeze until 2014.

-- Christmas, Easter and summer holiday bonuses, also known as 13th and 14th month salaries, are abolished for civil servants earning above 3,000 euros a month.

-- Public sector allowances cut by an additional 8 percent. These allowances had already been cut by 12 percent.

-- Freeze pensions in 2010, 2011 and 2012. The retirement age for women will be lifted by 5 years to 65 to match men and the number of contribution years will rise from 35-37 to 40.

-- The main VAT rate was increased by 2 percentage points to 23 percent. Excise taxes on fuel, cigarettes and alcohol are increased by a further 10 percent.

* SPAIN:

-- Spain's parliament has ratified labour reforms aimed at reviving the euro zone's No.4 economy. The process of debating and amending a bill on the reforms could take a year.

-- The government in May announced fresh spending cuts totalling 15 billion euros in 2010 and 2011. Spain's deficit targets are 9.3 percent of GDP in 2010 and 6 percent in 2011, compared to 11.2 percent in 2009.

Here are details of cuts and measures:

-- Civil service salaries will be cut by 5 percent in 2010 and frozen in 2011. More than 6 billion euros to be cut from public investment.

-- Suspension of yearly pension increases in 2011

-- Elimination of 2,500 euros birth payment from 2011.

-- 70 road projects put on hold for 2011.

-- VAT increased to 18 percent from 16 percent from July 1.

* FRANCE:

-- President Nicolas Sarkozy hopes reforms will convince investors he is serious about cleaning up state finances, which are set to register record deficit and debt levels in 2010.

-- Budget Minister Francois Baroin wants to cut the deficit by 40 billion euros by the end of 2011, 11 billion of which would come from a rebound in tax revenues, 15 billion from ending stimulus measures and 14 billion from spending cuts.

Here are details of cuts and measures:

-- Plans to raise the retirement age to 62 from 60 by 2018, make people work longer for a full pension and raise public sector contributions to private sector levels.

-- Top rate of income tax will be raised to 41 percent from 40 percent to help fund the pension regime.

-- Taxes on capital gains and investment income will also rise by a point.

-- All spending frozen, except pensions and interest payments on government debt, between 2011-2013 and state operating costs cut by 10 percent over that period.

-- Around 1,700 public buildings will be sold off. Office space will be cut by more than 500,000 m2 in three years.

-- State intervention spending such as subsidies and social support will be cut by 10 percent.

-- France will make savings on its defence budget of 3.5 billion euros in 2011-2013, a source close to the issue said.

* PORTUGAL:

-- Portugal's parliament approved the government's austerity package in June to speed up a reduction in the budget deficit to 7.3 percent of GDP in 2010 and 4.6 percent in 2011, from 9.4 percent in 2009. Portugal aims to save 2 billion euros in 2010.

-- Portugal ruled out drawing on the euro zone aid package, citing a successful bond sale and economic recovery in Q1.

-- Prime Minister Jose Socrates and opposition leader Pedro Passos Coelho drew up steps in June to slash the budget deficit.

Measures include:

-- 5 percent pay cuts for senior public sector staff and politicians.

-- Increases in VAT sales tax, income tax and profits tax up to 2.5 percent.

* GERMANY:

-- Chancellor Angela Merkel said her government aims to save around 80 billion euros between 2011 and 2014 and get the German budget deficit below European Union limits by 2013.

-- The cabinet agreed a package in June which will cut welfare spending by 30 billion euros over the period, reduce public sector payrolls by up to 15,000 by 2014 and raise new taxes on nuclear power plant operators and air travel.

-- The government also hopes to realise some 5.5 billion euros through subsidy cuts and raise 2 billion per year with a financial transaction tax.

-- Defence ministry experts have drawn up a list of potential savings in weapons and equipment worth more than 9.3 billion euros.

* IRELAND:

-- Ireland has carried out some of the harshest austerity measures in the euro zone. Ireland's public sector unions passed a pay deal in June, boosting government chances of pushing through further savings in the budget for 2011. The budget for 2010 presented in December projected a deficit of 11.6 percent of gross domestic product.

Measures include:

-- Cutting public service salaries by 5-15 percent in a 2010 budget that inflicted 4 billion euros of cuts. The government has promised no further public sector pay cuts until 2014

-- Three austerity budgets presented, in Oct. 2008, April 2009 and Dec. 2010, with the first two focused on tax rises. December's budget for 2010 delivered spending cuts of 4 billion euros, including a cut in public sector pay. ($1=.7806 Euro) (Writing by David Cutler, London Editorial Reference Unit; Editing by Jon Loades-Carter)

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