New Greek austerity measures

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 ...

LOUISA GOULIAMAKI/AFP/Getty Image
LOUISA GOULIAMAKI/AFP/Getty Image
LOUISA GOULIAMAKI/AFP/Getty Image

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. 

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. 

Annie Lowrey is assistant editor at FP.

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