Europe-IMF bailout, social cuts announced in Greece

In a nationally-televised May 2 cabinet meeting, the Greek government of Prime Minister Giorgios Papandreou announced massive social cuts worked out last week in negotiations with European and International Monetary Fund (IMF) officials. In exchange for these austerity measures, the European financial ministers' summit in Brussels decided to implement a €110 billion bailout package enabling Greece to pay its creditors...

As it absorbs the impact of these cuts, the Greek economy is expected to contract by 4 percent this year—compared to previous estimates of a contraction of 0.3 percent.


***Summary of cuts***

-- Public sector workers = 15 percent cut

-- Increase in retirement age for pensioners + longer pay-in period

-- Lower minimum wage for young workers

-- Sales tax increase of 2% (to 23%)

-- 10% increase in tax on fuel, alcoholic beverages, and tobacco

-- increased property taxes

-- one-time tax on "highly profitable" companies in athens

-- privatization of transit & utilities

-- cuts in healthcare spending

****end summary***

European governments decided to fund a bailout largely out of fear that a Greek default might lead to a new financial crisis and the bankruptcy of other countries, such as Portugal and Spain. Credit rating agencies recently downgraded both countries' debt. The social-democratic governments of Prime Minister José Luis Zapatero in Spain and Prime Minister José Sócrates in Portugal announced plans for further austerity measures last week, as the interest rate Spain and Portugal pay on new borrowing surged...

There are also fears of a new banking crisis as the value of Greek bonds—held as collateral by major European banks—collapses. Eurozone country banks hold €164 billion of Greece's roughly €300 billion in state debt, including €28 billion held by German banks, €50 billion held by French banks, and €20 billion held by Italian banks. Caja Madrid recently announced a 79 percent fall in quarterly profits, due to "shifts in sovereign bond markets."

According to a report appearing today in the German news magazine Der Spiegel, US Treasury Secretary Timothy Geithner pressed Berlin to rapidly agree to a bailout: "There was considerable American pressure applied on Germany to agree to the rescue package. Geithner demanded from Deputy Finance Minister Joerg Asmussen at a meeting of G7 finance ministers in Washington last week that Germany drop its resistance as fast as possible."

The Times of London interviewed law students at Athens University. Thanos Petrou, 21, said: "If I get a job as a trainee lawyer, I'll only earn €300 a month. How can anyone survive on that?" The Times added, "Some are already referring to a 'lost generation' who will never find jobs or security."

http://www.wsws.org/articles/2010/may2010/gree-m03.shtml

.. they are going to take it out of the sweat of the workers.

The same thing is going to happen in the United States.. massive cuts in social spending and a national sales tax .. all in the name of fiscal conservatism and a sudden outcry from the right about "deficit reduction". Both actions guaranteed to push to world economy into total collapse.

smokescreen.

through a bloodless coup.

The majority of them , due to past parliaments using bonus's as a backdoor to wage restraint, earn far more in bonus's than their actual wages. Civil servants get a daily ounus's just for turning up for work and foresters get bonus's for the occasions they need to work outdoors - that's most occasions.

This subject has been discussed in depth on TV news here in the UK over the past week or so - maybe not so in the USA.

Public sector workers face a 15 percent cut in their official wages: wages traditionally paid as "13th" or "14th" monthly salaries will disappear, replaced by a bonus capped at a maximum of €1,000 per year, available only for workers with monthly salaries under €3,000.

Wages will then be frozen until 2014.

Other bonuses—a large portion of public-sector workers' total pay—will be cut by 8 percent, on top of previous cuts of 12 percent.

.

Dear Greece,

You will now sell your natural resources to private (foreign) interests. The cuts in pay and increase in taxs may be temporary but the sale of natural resources will be forever!! You are now officially notified that you are totally fucked.

Sincerely,
IMF