Athens Turns Screws on Civil Servants as EU Hints at Help

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Post by BubbleBliss on Wed Mar 03, 2010 11:49 pm

Athens Turns Screws on Civil Servants as EU Hints at Help

In response to European Union pressure, Greece on Wednesday announced a further round of savings measures worth 4.8 billion euros. The plan calls for tax hikes and a 30 percent reduction in vacation bonuses for civil servants. Berlin has welcomed the move but says no direct aid to Athens will be forthcoming.

Already reeling under deep slashes to public spending, Greeks on Wednesday have been asked to shoulder yet more austerity measures as the country seeks to shrink a massive budget deficit and ward off bankruptcy.

The Greek government announced a combination of cuts and fresh revenues worth €4.8 billion ($6.5 billion) including a pension freeze and a 30 percent cut to holiday bonuses for the country's civil servants. In addition, Athens is to raise sales tax by two percentage points to 21 percent and has hiked taxes on alcohol, cigarettes, luxury cars and other high-end goods. The new austerity package augments previous measures aimed at cutting state spending by €8 billion - €10 billion.

"These decisions are necessary for the survival of the country and the economy so that Greece can exit the vortex of speculators and defamation, so that we can breathe and keep on fighting," Greek Prime Minister Georgios Papandreou told reporters on Wednesday.

Athens is under considerable European Union pressure to cut its budget deficit -- which currently stands at 12.7 percent of gross domestic product -- by four percentage points this year to shore up faith in the European common currency, the euro. Earlier this week, European Commissioner for Economic and Monetary Affairs Olli Rehn asked Greece to take further measures after Brussels determined that previously announced austerity measures would not be enough.

'The Right Step'

In addition to its deep budget deficit -- which is more than four times higher than the 3 percent allowed by the treaty governing the European common currency zone -- Athens also faces some €300 billion in sovereign debt. The country must refinance €20 billion of that debt by the end of May and a total of €53 billion this year. With investors concerned about Greece's ability to continue shouldering that debt, the country has had difficulties raising sufficient funds on the bond markets. A 10-year bond issue has been twice delayed as Athens tries to wait out market turbulence in the hopes of cheaper borrowing costs.

The German government welcomed the additional Greek austerity measures on Wednesday. Berlin "is confident that they will be greeted with a clear show of confidence" said deputy government spokesman Christoph Steegmans.

German Finance Minister Wolfgang Schäuble said that the new Greek measures show Athens is on the right track. "It is now decisive that Greece implements these resolutions quickly and completely." German Chancellor Angela Merkel added that the austerity measures were "the right step."

Speculation increased on Wednesday that the European Union may be working on a package to help Greece as a way to halt the euro's slide. Speaking in Brussels, European Commission President Jose Manuel Barroso said there was "intense debate" within the euro zone over how to assist members who face bankruptcy. "The concrete instruments, we will present them in due time," he said. "We have to have solidarity in the European Union."

Bleeding

Barroso's comments came during the announcement of a new economic plan for the next decade in the European Union. In addition to setting goals to lower unemployment and increase funding in research and development, Barroso also called for closer economic policy coordination in the EU. He said Brussels should more closely monitor economic performance in member countries to avoid the kind of crisis that has struck Greece.

In a televised address on Wednesday, Papandreou said, "We are awaiting European solidarity, the other side of this agreement." In mid-February, finance ministers from the euro zone promised to help Greece from sliding into bankruptcy, but declined to provide details as to what such a plan might look like. More recently, EU leaders -- led by Merkel -- have been insisting that no bailout of Greece would be forthcoming.

Still, with other euro-zone countries likewise facing high budget deficits and mountains of debt, more steps may be needed to prop up the euro. Any such steps are likely to be dependent on support from Berlin -- even as a wide majority of German voters are steadfastly against help for Greece. Papandreou will be in Berlin on Friday for talks with Merkel before heading to Paris on Sunday, though the German government said on Wednesday that Berlin was not planning to offer aid to Greece.

In response to the new austerity measures, Greece's 300,000 civil servants announced a 24-hour strike in protest, scheduled for March 16. "These measures will make us bleed to death financially. The measures will have an unbelievable effect on Greek society," said a union spokesperson on Greek radio.
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Post by TexasBlue on Thu Mar 04, 2010 12:46 pm

That's the answer! More taxes! When it's already in the shitter, make it worse! Chin Scratch
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Post by BubbleBliss on Sun Mar 07, 2010 12:13 pm

How else are you going to pay for the debt???
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Post by TexasBlue on Sun Mar 07, 2010 1:12 pm

Cut spending.. which is what this pResident here should've done.
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Post by BubbleBliss on Sun Mar 07, 2010 3:26 pm

The government doesn't have any money. They're not even spending and their citizens are barely paying any taxes because they're unemployed.
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Post by TexasBlue on Sun Mar 07, 2010 3:53 pm

You made my case. You can't raise taxes when everything is going down the sh!tter. Your statement clarified that. There comes a time where the gov't has to just go broke. I hate to see that or even say it. If you raise taxes in a Greece situation, it's going to expedite the fall of what ever economic prosperity they have.... which ain't much.
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Post by BubbleBliss on Sun Mar 07, 2010 9:27 pm

No, I did not. Taxing the people who still do money is like issueing the gov't a bailout, the gov't needs money to start over. They've gone broke, now should they continue to stay broke?
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Post by The_Amber_Spyglass on Mon Mar 08, 2010 3:19 am

BubbleBliss wrote:How else are you going to pay for the debt???
Bild has suggested that Greece sell off some of its islands (the uninhabited ones), privatise the Athenian Acropolis and suggested that the Greeks start getting up before midday and work harder.




Dear prime minister,

If you're reading this, you've entered a country different from yours. You're in Germany.

Here, people work until they are 67 and there is no 14th-month salary for civil servants. Here, nobody needs to pay a €1,000 bribe to get a hospital bed in time. Our petrol stations have cash registers, taxi drivers give receipts and farmers don't swindle EU subsidies with millions of non-existent olive trees.

Germany also has high debts but we can settle them. That's because we get up early and work all day. We want to be friends with the Greeks. That's why since joining the euro, Germany has given your country €50bn.

http://www.guardian.co.uk/business/2010/mar/05/bild-open-letter-greece-papandreou


Last edited by The_Amber_Spyglass on Mon Mar 08, 2010 3:26 am; edited 1 time in total (Reason for editing : added letter)
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Post by BubbleBliss on Mon Mar 08, 2010 7:34 am

The_Amber_Spyglass wrote:
BubbleBliss wrote:How else are you going to pay for the debt???
Bild has suggested that Greece sell off some of its islands (the uninhabited ones), privatise the Athenian Acropolis and suggested that the Greeks start getting up before midday and work harder.

That's a good point.... selling Islands can get the gov't a lot of money, but Privatizing the Athenian Acropolics?

Well what I've found in Souther European cultures is that they get up later, sleep during lunchtime, but they work a lot longer. It's because of the heat and just the way of life. Even getting up earlier for store owners, etc. won't do anything.

The_Amber_Spyglass wrote:


Dear prime minister,

If you're reading this, you've entered a country different from yours. You're in Germany.

Here, people work until they are 67 and there is no 14th-month salary for civil servants. Here, nobody needs to pay a €1,000 bribe to get a hospital bed in time. Our petrol stations have cash registers, taxi drivers give receipts and farmers don't swindle EU subsidies with millions of non-existent olive trees.

Germany also has high debts but we can settle them. That's because we get up early and work all day. We want to be friends with the Greeks. That's why since joining the euro, Germany has given your country €50bn.

http://www.guardian.co.uk/business/2010/mar/05/bild-open-letter-greece-papandreou

He put it right on the dot. The Greek government is corrput beyond belief, which is why Greeks have been protesting in the last couple of months/years.
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Post by The_Amber_Spyglass on Mon Mar 08, 2010 7:49 am

Yeah I know... but this is Bild. Very Happy
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Post by BubbleBliss on Mon Mar 08, 2010 8:30 am

What's that supposed to mean? Very Happy
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Post by The_Amber_Spyglass on Mon Mar 08, 2010 9:48 am

BubbleBliss wrote:What's that supposed to mean? Very Happy
Aren't they a really low class newspaper? At least, that's what I've heard from some Germans I used to work with, equivalent of our The Sun.
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Post by BubbleBliss on Mon Mar 08, 2010 11:16 am

Let's just say they're the Drama queen of Newspapers. They were heavily targeted in the 70s when the RAF was launching its terrorist attacks...
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Post by The_Amber_Spyglass on Mon Mar 08, 2010 12:00 pm

I presume you mean Rote Armee Fraktion rather than Royal Air Force?
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Post by BubbleBliss on Mon Mar 08, 2010 12:02 pm

haha Nope. The Royal Air Force was the most terrible organization back in the day.... constantly launching terrorist attacks against German gov't buildings trying to force their left-wing view on the German gov't. ROFL Laughing

I ALWAYS forget that RAF also stands for Royal Air Force. haha that's my mistake, Matt. XD
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Post by The_Amber_Spyglass on Mon Mar 08, 2010 12:06 pm

Well I discounted
* Rapid Action Force - India's elite police force
* Russian Air Force
* Rwandan Air Force
* Russia Automobile Federation
* Riga Autobus Factory

and all the others on wikipedia for RAF.

http://en.wikipedia.org/wiki/RAF_%28disambiguation%29
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Post by BubbleBliss on Mon Mar 08, 2010 12:13 pm

Yeah, I probably should have specified from the beginning..
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