Prime Minister Antonis Samaras, addressing a New Democracy party meeting promised that the new austerity package for 2013-2014 would be last. “This is the last such package of spending cuts… The Greek economy can take no more”, the Premier said, according to Associated Press.
“Many of these cutbacks are difficult, painful,” Samaras said. “But they are also inevitable. For without them the country would return to zero credibility and effectively leave the euro. Which would… destroy the country.”
Talking about his recent trips to Berlin and Paris, Samaras said “first of all we changed the climate in Europe which was the first condition to remain in the euro. If we want to have a recovery we must stick to the euro and also bring liquidity to our economy. We regained some of our credibility and told the Europe leadership that we need recovery. We asked Europe to stop the harsh statements against our country,” the PM said, protothema.gr writes.
A draft of the austerity package list was given yesterday to coalition leaders, who will meet again, before next week’s visit by the EC-ECB-IMF troika.
According to Kathimerini.gr, austerity cuts being proposed are even harsher than expected. These include the abolition of the traditional holiday payments (at Easter, Christmas and summer) for all pensioners, not just former civil servants (savings EUR 2.5 billion). It also emerged that the ax will likely fall on all pensions above EUR 800, with cuts starting at 2% and reaching 20% for the highest levels. The government hopes to raise EUR 4.5 billion through pension cuts alone.
The proposed package also foresees fresh cuts to healthcare (EUR 1.3 billion), some EUR 500 million of cutbacks in defense and EUR 750 million in cutbacks to local authority subsidies.
Cuts to special payrolls of certain categories of civil servants such as judicial and military staff as well as priests will reach 12%, according to the proposal, which aims to raise EUR 800 million in this area. It is likely that police officers and other members of security forces with dangerous jobs, will be excluded from this measure.
As for civil servants, the likely scenario involves between 35,000 and 40,000 employees leaving the public sector by 2014, either through early retirement or for failing to pass an evaluation. Another 110,000 are to leave the service by 2015 either through retirement or the termination of their contracts, Kathimerini.gr writes.
According to protothema.gr, disagreement remains within the coalition as regards cuts of pension bonuses, main pensions and special payrolls, as well as disability benefits, all discussed during Wednesday’s night meeting between the leaders of the three ruling parties.
Finance Minister Yannis Stournaras will meet the heads of the troika on Sunday (Sep. 9), to present the new austerity package, a finance ministry official said yesterday.
Troika officials are to arrive on September 5 and travel to Nicosia on September 13 ahead of a Eurogroup summit there on September 14.