September 28, 2012
After the meeting between troika and the Greek coalition government on Thursday 27th of September, the new measures are now being elaborated as they have to be passed by the Greek Parliament in a couple of weeks and start being implemented in the months -and years- to come. Let us have a look.
1. Public spending cuts are supposed to reach 10,5 billion euro while new fiscal measures are expected to reach 3 billion euro.
2. Abolition of the thirteen (13) and fourteen (14) pension attributed in Christmas and Easter (or summer) in the public sector.
3. Dismission and / or insertion of the “availability clause” (i.e. “freezing”) of 15,000 public servants (i.e. decrease of salary and lowering of working hours weekly).
4. Increase of the average retirement years form 65 to 67, subsequent increase of age rates for mothers, and immediate, premature, and lower pension for those being force to retire two years before fulfilling the necessary retirement years.
5. Cuting off pensions in overall, including the decrease in basic and supplementary pensions for those pensioners receiving over 1,000 euro per month.
6. 25% increase in public transport ticket rate.
7. Imposition of student fees for all Master Programmes in education.
8. Vertical cut to solidarity subsidiaries for registered unemployed people.
9. Decrease of health coverage from the respective public and private insurance funds.
10. Cutting off spending funds for the national healthcare system.
These are the deeds agreed between troika and the Greek government. It is fundamental to point out that none of the measures were proposed by the Greek side, while we see that there is no measure aiming at combatting tax evasion and no indication or clause for growth packages as alternative.
It is needless to say that, to my point of view, almost all measures agreed cannot be implemented. I justify this belief on the simple fact that average and low-income taxpayers have no more money to pay and give to the public funds. Therefore, further spending cuts along with additional fiscal measures can only lead mathematically to social dehumanisation and extreme poverty. In addition to that, and this is a primarily domestic issue/problem, prices of consumer goods remain irrelevantly high comparing to other robust markets like the ones in London, Berlin, and Paris.
To conclude with, I see no prospects of development, or at least signs of macroeconomic stabilization in Greece, and this fact by itself is a major issue that no negotiating side is taking into consideration.
Comments are left to you.Dimitris Rapidis