Greek Leaders Agree on Most Budget Cuts

Greek political leaders are currently discussing pension and wage cuts to find the final 1.5 billion euros needed to satisfy the demands by its creditors.

Although Greece’s debt plan is almost drawn up, three government parties still failed to agree on some of the measures drawn up by prime minister Antonis Samara. The total budget cut for 2013-2014 is 11.5 billion euros, according to Reuters.

Citizens strongly disagree on the austerity measures and have organized several protesters, sometimes reaching hundreds of thousands in participants and having deadly consequences. Mainly against tax raise and pension cuts, they believe measures offered will keep Greece’s head above water for a while, but don’t keep Greece from drowning at some point.

“Greece received 110 billion euro bailout from the European Commission and the European Union, that is the largest received by any country ever,” explained Paul Thompson the International Monetary Foundation member.

According to Greek media reports the country’s leaders are currently discussing possible layoffs of contractors in the public sector, a cap on pensions, cuts in welfare benefits, reductions in tax exemptions, and lower salaries for public employees as well as raising the retirement age by a year.

Lenders are currently on a visit to evaluate the country’s progress. „We’re here to help and we’ll be here until the plan is finalized,“ Paul Thompson added. Thomson believes Greece’s minimum wage must be cut as well, by at least 22%.

Cuts in welfare spending hit the average person hardest. According to Haralambos Economou, a sociology professor at Panteion University in Athens, Greece has recently cut 800 million euros on public health spending. For Jobless, who make up 21% of the population, health care is becoming a privilege.

Greece has the second highest rate of corruption in the world and poor standards of tax collection which is the main cause for its financial disaster. Now Greece is trying to convince EU and IMF of its new economical moves and is ready to move on with its new reforms.

Greece’s exit from euro zone more likely than ever

Yet US banking group Citygroup prognoses Greece’s exit from euro zone in the following 12-18 months is 90% certain, mostly due to its unstable government that hasn’t helped get Greece’s fiscal situation in order.

While most EU countries prefer to find a solution which is as painless as possible, Latvia prefers Greece exits from euro zone urgently to avoid further damaging the currency bloc which Latvia hopes to join by 2014.

Tagged austerity measures, budget, debt, fiscal, Greece