June 10, 2011 / 1:39 PM / 6 years ago

Factbox: Greece pledges new austerity measures to EU/IMF

(Reuters) - Greek Prime Minister George Papandreou defended on Friday a new package of austerity measures required by the EU and the IMF, saying it was the only way out of the crisis.

The plan includes 6.5 billion euros worth of extra austerity steps for this year and savings of 22 billion euros for 2012-2015 to cut deficits and keep qualifying for EU/IMF aid. It also speeds up the sale of state assets under a 50 billion euro privatization program.

Here are the main measures and targets, as presented by the Greek Finance Ministry and by the EU and the IMF in a document obtained by Reuters:


* TAX INCREASES: taxes will increase by at least 2.45 billion this year, with additional taxes of 2.88 billion euros in 2012, 450 million euros in 2013 and 300 million in 2014.

This includes higher property taxes, legalization of unauthorized buildings, a VAT rate hike on restaurants and bars to 23 from 13 percent, a “solidarity levy” on households, steeper consumption taxes on soft drinks and natural gas, luxury levies on yachts, pools and cars. The government also wants to scrap a string of tax exemptions.

However, the government said on Friday, in a fresh bid to seek the opposition conservatives’ backing for the plan, that it may submit in September a bill to cut VAT and corporate taxes.

* CUTTING THE PUBLIC SECTOR WAGE BILL: 800 million euros in 2011, and 660 million in 2012, 398 million in 2013, 246 million in 2014 and 71 million in 2015.

Reduction will come from a curb on hirings, allowance cuts and by firing or not renewing contracts this year for 50 percent of all public sector workers employed under temporary contracts.

* CUTS IN SOCIAL BENEFITS: 1 billion euros this year (up from a May target of 833 million), 1.26 billion in 2012, 1 billion in 2013, 790 million in 2014 and 400 million in 2015.

Reduction will mainly come by means-testing beneficiaries and cutting a string of benefits.

* INCREASE SOCIAL CONTRIBUTION RECEIPTS: at least 629 million euros this year, 259 million in 2012, 713 million in 2013, 1.13 billion in 2014 and 337 million in 2015.

To be achieved through an increase in social security contributions and by cracking down on contribution evasion and undeclared labor.

* CLOSE/MERGE PUBLIC ENTITIES AND SUBSIDIES: 491 million in 2011, with further 279 million euros in savings in 2012-2015.

* FIGHTING TAX EVASION: 878 million euros in 2013, 975 million in 2014 and 1.15 billion in 2015.

* CUTS IN PUBLIC INVESTMENT SPENDING: 700 million euros this year, half of which will be permanent.

* Defense CUTS: 200 million euros in 2012, and 333 million euros each year in 2013-2015.

* CUTS IN HEALTHCARE SPENDING: at least 310 million euros this year and a further 1.43 billion euros in 2012-2015, mainly by lowering regulated prices for drugs and widening the use of e-prescriptions.

* OTHER MEASURES include savings in state-owned enterprises and cuts in subsidies to local government.



The government aims to raise a total of 50 billion euros from privatizations by 2015 and the new plan speeds up the sale of stakes in state firms by 3-6 months.

Here are some key sales:


* It aims to get 5 billion euros by selling stakes in betting monopoly OPAP, lender Hellenic Postbank, port operators Piraeus Port and Thessaloniki Port as well as Thessaloniki Water

among others.

Greece on Monday agreed to sell a 10 percent stake in Hellenic Telecom (OTE) to Germany’s Deutsche Telekom. The government exercised its “put” option to sell the stake for around 400 million euros.


* The government plans to raise 10 billion euros by selling stakes in Athens Water, refiner Hellenic Petroleum, electricity utility PPC, lender ATEbank as well as ports, airports, motorway concessions, state land and mining rights.


* Plans are to raise 7 billion euros in 2103, 13 billion in 2014 and 15 billion in 2015 with property sell-offs, and yet more stakes in ports, airports and highways.

Writing by Ingrid Melander, Renee Maltezou and Harry Papachristou; Editing by Toby Chopra

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below