Greek government examines major cuts in salaries and job dismissals in public sector to restrain the state deficit.
Only two week before the arrival of troika representatives in Athens, the government attempts to cover delays and shortfall in revenue. Knowing that time is not enough and that debt should be repaid at all costs, Greece prepares a new package of measures.
The final decision would be made along with the troika and the range of interventions would depend on the performance of ministries in the coming days.
Ministers are called to launch initiatives to cover some of the obligations of the memorandum in August. However, it is estimated that the target in revenue is unreachable.
Despite statements of satisfaction about the increased revenue in July after months of decline, government officials are well aware that a gap of €2.3b requires further measures to maintain the goal of deficit reduction.
The deep recession rules out new tax increases, according to an official. Measures would be based solely on spending, while the results of the battle against tax evasion would be decisive.
Deputy Finance Minister P. Economou has undertaken to produce results quickly. The measures examined include:
1. New cut of investment funds. The Public Investment Program has received several blows already as it is considered the “easy solution”.
2. Suspension of payments. Spending cuts for public organizations (utilities, funds, hospitals, municipalities, etc.).
3. Payroll, shutdown of public organizations and job dismissals. The government has not raised the issue of dismissals, which is written explicitly in the Memorandum of Understanding, as it is considered the last “resort”.
(source: capital)
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