Brussels, 03/03/2010 (Agence Europe) - On Wednesday 3 March, the European Commission welcomed the new austerity measures announced by Greece to tackle its economic crisis. The new measures, along with other measures already announced by the Greek government as part of its stability programme, will be discussed by EU ministers at the Economic and Financial Affairs Council (ECOFIN) on 16 March.
“This announcement confirms the Greek government's commitment to take all necessary measures to deliver the programme's objectives and in particular to ensure that the 4% of GDP deficit reduction target for 2010 will be met,” said José Manuel Barroso, President of the European Commission, at a press conference. His positive outlook was shared by the chair of the Eurogroup (the group of eurozone finance ministers), Jean-Claude Juncker.
Barroso said that “Greece's ambitious programme to correct its fiscal imbalances is now on track. The amounted measures are essential for achieving permanent fiscal consolidation effects and restore competitiveness. Full and timely implementation of fiscal measures, along with decisive structural reforms, in compliance with the Council decision is paramount.”
Barroso went on: “This is in the interest of the Greek people. It is as well important for the overall financial stability of the euro area.”
On Wednesday, Greece's Socialist government announced new austerity measures to save €4.8 billion, including a 2% rise in VAT to 21% (to increase Greece's GDP by 0.5% and net some €1.3 billion in); a 30% cut in civil servants' first month of holiday pay and a 60% cut in their second month of holiday pay; a freezing of civil servants' and private sector workers' retirement pensions; a 20% increase in excise duty on alcohol; and an 8 eurocent a litre increase in duty for petrol and a 3 eurocent a litre increase in duty on diesel. Cigarettes will go up by 63% and the government will be hiking up real estate taxes. The law to introduce the measures will be voted upon in an emergency sitting of the Greek parliament on Friday 5 March.
The Greek prime minister, George Papandreou, will be travelling to Berlin on Friday to meet the German Chancellor, Angela Merkel, before travelling to Paris on Friday to meet the French president, Nicolas Sarkozy. (L.C./transl.fl)