May 2, 2010 / 11:09 AM / 10 years ago

FACTBOX-Details of Greek austerity deal with EU/IMF

 May 2 (Reuters) - Greece announced new austerity measures on
Sunday paving the way for a multi-billion euro bailout from the
European Union and International Monetary Fund. [nLDE6400CL]
 Under pressure from financial markets, cash-strapped Greece
has announced four austerity packages over the past five months,
but failed to reassure markets, partly because the government
never spelled out specific budget cuts for 2011 and 2012.
 Under the new plan, Greece will narrow its budget shortfall
from 13.6 percent of gross domestic product last year to 8.1
percent this year, 7.6 percent in 2011 and 2.6 percent in 2014.
 Public debt is seen peaking at 149 percent of GDP in 2013
and then falling to 144 percent of GDP in 2014. Below is an
table of new government forecasts and an outline of the main
measures announced on Sunday:
 
----------------------------------------------------------------
 FORECASTS UNDER GREECE'S NEW FISCAL ADJUSTMENT PROGRAMME
 
                       2010    2011   2012    2013    2014
 GDP                   -4.0    -2.6    1.1     2.1     2.1
 DEFICIT (pct of GDP)  -8.1    -7.6   -6.5    -4.9    -2.6
 DEBT (pct of GDP)    133.3   145.1  148.6   149.1   144.3
 Source: Greek finance ministry document
----------------------------------------------------------------
 
 PUBLIC SECTOR SPENDING CUTS
 - Public sector pay freeze extended until 2014.
 - Christmas, Easter and summer holiday bonuses in the public
sector, also known as 13th and 14th salaries, are abolished for
those earning above 3,000 euros a month and will be capped at
1,000 euros for those earning less. These bonus salaries had
already been cut by 30 percent under a previous set of austerity
measures announced in March.
 - Public sector allowances to be cut by an additional 8
percent. These allowances, which account for a significant part
of civil servants' overall income, were already cut by 12
percent under the latest round of austerity measures announced
in March.
 
 ADDITIONAL TAX MEASURES
 - The main VAT rate is increased by 2 percentage points to
23 percent. It had already been raised to 21 percent from 19
percent in March.
 - Excise taxes on fuel, cigarettes and alcohol are increased
by a further 10 percent.
 - The government expects to generate additional revenues
through another one-off tax on highly profitable companies, as
well as new gambling and gaming licences, more property taxes
and green taxes.
 
 PRIVATE SECTOR
 - The government said it will revise laws which currently
bar companies from firing more than 2 percent of their total
work force each month. Other changes will be made regarding
severance payments. A new minimum wage will be introduced,
applying to the young and the long-term unemployed.
 
 STRUCTURAL REFORMS
 - Liberalisation in the energy, transport markets and
opening up of closed professions.
 
 PENSIONS
 - The retirement age, currently 65 years for men and 60
years for women, will be linked to average life expectancy.
 - Minimum contribution period to qualify for full pension
will be gradually increased to 40 years from 37 years by 2015.
 - Early retirement will be curtailed, with a view to banning
any retirement below 60.
 - Pensions will be cut, to reflect a pensioner's average pay
over the entire working life rather than his or her final salary
level.
 
 BANKS
 The Greek government is extending a bank assistance package
to provide 17 billion euros in liquidity to the sector and will
also set up, in consultation with the IMF, European Commission
and ECB, an independent Financial Stability Fund to provide
equity support to banks as needed.
 
 (Reporting by Harry Papachristou; Editing by Noah Barkin/David
Stamp)

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