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Greece announces fresh austerity measures

0 Comment(s)Print E-mail Xinhua, September 22, 2011
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Greece announced on Wednesday evening a fresh package of austerity measures to weather the debt crisis that threatens the eurozone country with default.

Up to 30,000 civil servants will be dismissed by the end of 2011 through a labor reserve program, according to a statement following a marathon cabinet meeting chaired by Prime Minister George Papandreou.

The socialist government also decided further cutbacks on pensions in the public sector. Pensioners who currently receive above 1,200 euros (1,652 U.S. dollars) monthly will lose 20 percent of their income, said government spokesman Elias Mossialos.

Additionally, pensioners younger than 55 years old who get monthly pensions over 1,000 euros (1,377 dollars) will see their income reduced by up to 40 percent.

According to the statement, the tax-free limit of annual income will be reduced to 5,000 euros (6,885 dollars) which is the average rate within the eurozone, as it is stressed. The current rate stands at 8,000 euros (11,016 dollars) yearly.

The set of policies would be introduced over the next four years, starting from next month, said the spokesman.

Mossialos added that the tax system reform draft bill will be put on vote before the parliament by November this year, "aiming to put an end to decades long unfairness that undermine the social and growth coherence of the country."

Stressing that Greece will remain a member of the eurozone bloc, Mossialos said that the new measures guarantee that Athens will meet all deficit cutting and development targets until 2015.

"The message to international markets and our counterparts is that Greece will honor its commitments," said Mossialos, noting that European Union (EU)/International Monetary Fund (IMF) auditors will return to Athens next week to continue deliberations with Greek officials.

Greece was granted multi-billion euro EU/IMF rescue loans in May 2010 to avoid the default under certain terms to slash deficits and return to growth over a three-year period, but as it lags on some targets lately, foreign lenders have requested supplementary policies and concrete results before releasing further aid this autumn.

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