The Greek Debt Mess

Unwilling to control spending because the US and the EU is picking up the bill, even the small changes being imposed are meeting stiff political resistance. CNBC has this:

Union opposition to the Greek government's austerity program intensified Monday as tax collectors went on strike, and power workers vowed to sabotage a new emergency property tax aimed at plugging a budget gap spotted by international creditors.

Tax and customs workers walked off the job for two days to protest cuts in their bonus pay while the power company union said it would "not allow the company to be used as a tax-collecting mechanism" for the property levy, which will be included on household electricity bills and is expected, together with fresh public sector cuts, to reap €2 billion ($2.7 billion) this year.

The government, which said it chose that system of payment because of inefficiencies within the tax authorities, called the union threat "unacceptable."

The latest bout of labor unrest came as the European Commission said Greece's budget deficit this year will be more than expected. It said the country's deficit as a percentage of national income would likely reach 9.5 percent, up from the originally predicted 7.6 percent. . . .

In the first eight months of the year, the country's budget deficit was €18.1 billion, already exceeding the annual target of €17.1 billion. The ministry attributed the bulk of the shortfall to the deeper than expected recession this year — the Greek economy is expected to contract a further 5.3 percent — but said that the public finances will get better in the next four months as new tax hikes and spending cuts come into effect. . . .



Post a Comment

<< Home