Keeping in view the dire financial state of the debt-ridden country, the Greek Cabinet submitted recommendations for approval to the Parliament to impose additional austerity cuts. For the release, a sale of government owned equivalent to euro50 billion ($73 billion) will be required.
During the previous year, the international creditors advanced a loan of euro 110 billion ($160 billion) subject to implementation of reforms. The European partners and the International Monetary Fund have issued a warning to stop further release of funds.
Already facing recession, blocked out from the international bond market and without the next euro12 billion bailout, the country will default on its debts.
The medium term framework seeks to reduce7.5% deficit of the GDP in 2011, 3% in 2014 and 1% in 2015.
The governing Socialist party has 6 seats in the 300-member legislature; and its members are not in favor of the stern regulations, which follow a series of cuts, made in the past year in salaries and pensions. An increase in taxes and retirement age was also put into effect leading to unemployment. Expenditure on defense, education, health and other social sectors will be curtailed further.
Awareness of the financial crisis will stop the discontented policymakers to cast a negative vote. Once the reform package is approved, a supplementary enactment will be put in place for the implementation.
The new plans include further increase in taxes and cut of euro 6.4billion ($9.4 billion). There will be a euro22 billion ($32.15 billion) austerity drive from 2012 to 2015. The privatization process will be accelerated.
All Greeks earning more than 8 to 10 thousand Euros annually will be subjected to an additional 3% tax for the next four years. The sales tax on restaurants and bars will be increased from 13% to 23%.
The finance ministers from Euro zone meet at Brussels on June 20, while the EU leaders will meet on June 23-24, to discuss the Greek crisis.
Presently unemployment rose to 16%, which has led to strikes by almost all sectors.
