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New Memorandum Brings More Austerity to Greece


The Greek government has taken a series of new measures in order to convince troika to return to Athens and start the negotiation process once again.
These new measures are estimated to ensure approximately 1.2 billion euros for the Greek government and will be able to cover the deficit for 2014. However, these series of measures do not include new taxes or cuts in wages or pensions but rather expense reductions and the application of a unified wage in every sector.
During the negotiations, the Greek government will be forced to accept about a 4 percent cut in social security contributions, but remains opposite on the collective redundancies measure.
The Greek Ministry of Finance’s goal is the return of troika to Athens in order to ensure that the upcoming Eurogroup, will grant Greece the installment of 3.1 billion euros for the fourth trimester of 2013, as well as the installment of 5.7 billion euros for the first trimester of 2014.
According to Naftemporiki, the new bailout signifies a new period of austerity from 2014-2017. The Greek government is expected to reduce its expenses up to 4 billion euros while there will be a tax revenue increase up to 2.5 billion euros.
The new bailout aims to achieve high primary surpluses that will come up to 4.5 percent of the GDP in 2016.
Greece is undergoing an economic adjustment program with certain goals that aim to make the country’s economy viable and to reduce the public debt under 120 percent by 2022. In order for these goals to be achieved, the Greek government needs to abide by the measures agreed between the country and the Commission, the IMF and the ECB.
This is what the Eurogroup members in Hague and Brussels answer to the question whether or not additional policy measures will be taken.
It’s quite clear that Greece needs to take additional policy measures for 2014 and 2015 in order for the economic funding program to continued. However, it is the government’s job to fairly deal with the taxation burden imposed on its people.

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