2024-04-21 00:39:45
He may publicly argue that the Greek debt is sustainable, but in his private discussions with representatives of international houses he admits that its management has reached a dead end. According to completely cross-referenced information from “democracy”, Finance Minister Giorgos Papakonstantinou recently admitted while talking to a representative of an international economic research house that “the Greek debt is now unsustainable”. Essentially, with this admission, the minister admits that some kind of restructuring of the Greek debt is required, that is, either the holders of Greek bonds are forced to exchange the bonds they have with others of longer duration and with a lower interest rate, or to accept a reduction in the nominal price of the bonds ( haircut).
What is now acknowledged by the international press and by the responsible Greek minister is also the watershed of the government’s economic policy, which has brought the country into a dire economic situation and the government at the mercy of the appetites of the troika of our creditors and the powers of Europe. Characteristic of the above is that the finance minister was humiliated internationally this week. At the eurozone finance ministers’ council (Eurogroup) held on Monday, his colleagues demanded that the heads of the troika attend the meeting in order to inform them first hand about the real state of the Greek economy (apparently they don’t believe what the Greek is telling them Minister of Finance). Equally humiliating was the fact that the Eurogroup returned to George Papakonstantinou the original draft of the Medium-term Fiscal Framework as general, vague and ultimately unacceptable.
The climax of the humiliation of the Greek minister was the fact that he was so narrowed in time to concretize the measures of the four-year framework and especially the additional measures of at least 6 billion for this year and the privatisations, that he hastily left Brussels on Monday for Athens and did not participate in the meeting of Ecofin (Council of Finance Ministers of the European Union) held on Tuesday.
The new wild measures that have “locked”
Since Tuesday, the minister has been continuously holding meetings with officials of the Ministry of Finance as well as the heads of the troika in order to finalize the components of the new austerity package that will be imposed on the Greeks until 2015. The measures that have actually been announced as well as those that, according to secure information, they “lock” soon, among others, concern:
1. Dismissals of thousands of employees of the wider public sector under the pretext of evaluating them as insufficient by ASEP. Employees of DEKOs and public bodies that are about to merge or be abolished have been targeted. At the same time, more than half of the contract holders of a certain time and project will be removed from the State through non-renewal of their contracts.
2. Reduction of supplementary pensions through the imposition of a special LAFKA type levy (the measure will be included in this year’s additional measures amounting to at least 6 billion euros).
3. Abolition of the residual “gifts” to civil servants of a total annual amount of 1,000 euros gross paid to those who have a gross monthly remuneration of up to 3,000 euros together with allowances. The measure is being considered to be implemented from the summer in order not to pay the leave allowance.
4. New wage reductions for DEKO workers.
5. Sweeping privatizations with the immediate sale of at least one large state-owned enterprise (e.g. PPC, EYDAP).
6. Reduction by 50% of the tax-free limit of the Real Estate Tax. Specifically, from the 400,000 euro individual objective value limit, it is being promoted to reduce it to 200,000 and convert it into a family one. In this way and in combination with the increase in property prices, almost all Greeks will be asked to put their hand in their pocket for the payment of real estate tax (the measure will be implemented from this year).
7. The increase from September of objective prices in real estate.
8. The establishment of income criteria from this year for the payment of social benefits (unemployment, large children, etc.).
9. The imposition of income criteria for tax exemptions.
10. The reclassification of products from the low VAT rate of 13% to the high rate of 23% along with the abolition of the reduced rates that apply to the undeveloped islands of the Aegean.
11. The imposition of extraordinary contributions to the self-employed in combination with the imposition of new stricter living standards.
12. Imposition of consumption tax on soft drinks.
Spyros Dimitrelis
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