Taxes up, pay cut in Greek austerity drive
Updated on 09 February 2010
Unions in Greece call a series of strikes after the country's finance minister announced plans to increase the retirement age, raise fuel taxes and cut public sector pay.
Greece's Socialist government revealed its austerity measures in an attempt to cut a deficit that has ballooned to nearly 13 per cent of the country's national income.
That is more than four times what Eurozone rules allow.
Finance Minister George Papaconstantinou said his proposals would save the state 800 million euros this year.
"The time has come for major changes. The country can't afford to wait any longer," Papaconstantinou said.
"Everybody needs to contribute clearly to the big effort to save our economy."
Read Faisal's blog on the situation in Greece
The government has unveiled new bills on public sector wages and taxation.
Higher earners will face the biggest tax burden, and the prime minister and his government will not get a pay rise this year.
The government has also announced a freeze in public sector salaries. The pension age will also rise by 2 years.
There are also higher taxes on fuel, tobacco and alcohol, along with tough new tax evasion measures.
A majority of Greeks support tough measures to reduce the government's deficit, but the powerful ADEDY public sector union will tomorrow stage a 24-hour stoppage in protest at the cuts.
European Union finance ministers will meet later this week to discuss Greece's financial crisis.
There is speculation the country could be bailed if it shows commitment to sanitise its finances.
The financial markets have been unnerved by high borrowing across the EU.
In Spain, government borrowing is little better than Greece. Portugal has a deficit above 8 per cent of national income.
Ireland has also had to make cuts.
At more than 12 per cent of national income, Britain's deficit is just as high as the eurozone's weaker members.
