Greece prepares large cuts in public sector wages to meet bailout terms
Athens, Greece (AHN) – The Greek government is preparing tougher belt-tightening measures as it attempts to meet the terms of the country’s $110 billion (EUR 78 billion) bailout.
Prime Minister George Papandreou rejected debt restructuring ahead of a Monday cabinet meeting to tackle austerity measures, which includes tax hikes and sale of government assets.
Papandreou’s policy is in line with the European Central Bank stand that did not favor a debt restructuring for Greece. However, the drastic wage cut proposal may lead to more civil unrest among public employees. A study published on Sunday found that 80 percent of Greeks are not willing to make any more sacrifices for the country to enjoy further European Union and International Monetary Fund support for the bailout.
Experts opined that Greece is so mired in a debt spiral that more austerity measures would cause further recession and drastic drops in tax revenues. They warned that these economic consequences are self-reinforcing and very difficult to recover from.
While the prime minister is ready to fast track a $70.4 billion (EUR 50 billion) privatization program to raise more money to pay off the country’s mountain of debt, Papandreou said the government will keep its holdings in water and electricity utilities.
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