Brussels, 06/12/2011 (Agence Europe) - In the evening of Tuesday 6 December, Greece issued yet more austerity measure for 2012 in order to display the government's commitment to meet its public spending with regard to its foreign creditors, the European Union and the International Monetary Fund (IMF).
Greece is being forced to introduce a draconian budget of cuts and austerity for the third year in a row in the hope of cutting the public deficit to 5.4% next year. The 2012 budget will cut wages, increase taxes and lay off thousands of civil servants. It is expected to reduce its public deficit to 9% of GDP in 2011 rather than 6.8% as initially planned because of the impact of enduring austerity. The finance minister, Evangelos Venizelos, said that the government was expecting a primary surplus of 1.1%, the first surplus in many years, by which he means a public deficit not including debt servicing. The new coalition government set up on 11 November by Lucas Papademos will pledge to introduce the second Greek bailout (decided upon in October 2011), which will provide the country with a second loan of some €130 billion by 2014, €30bn of which is to shore up bank finances after the 50% write-down in the face value of Greek bonds held by the private sector (banks, pension funds, insurance companies and the like). (LC/transl.fl)