- By Annie LowreyAnnie Lowrey is assistant editor at FP.
Yesterday, the Greek government announced a spate of emergency austerity measures, designed to help the country close its yawning budget gap. Half are new taxes, and half are spending cuts, including:
- Hiking the VAT from 19 percent to 21 percent (worth 1.3 billion euros)
- One-off corporate tax (1 billion)
- Cutting "holiday bonuses" by 30 percent (740 million)
- 2 percent supplemental gas tax (450 million)
- Freeze on state pensions (450 million)
- Reducing bonuses and pay by 7 percent for public sector employees (360 million)
- 2 percent supplemental cigarette tax (300 million)
- Supplemental electricity tax (250 million)
- One-off tax on vacation homes and oversized properties (200 million)
- Cuts to pension subsidies (150 million)
- Supplemental tax on luxury goods, e.g. yachts and cars worth more than 35,000 euros (100 million)
Other measures include: an additional 1 percent tax on income over 100,000 euros, reducing government overtime hours by 30 percent, cutting public-sector benefits 10 percent, and taxing the commercial activities of churches. And it’s still not quite enough — Greece needs an additional bailout to help it pay off debt due this spring.