FinMin meeting with troika inspectors

Finance Minister Evangelos Venizelos, who replaced Giorgos Papaconstantinou in a Cabinet reshuffle last week, was meeting with inspectors from the European Union and the International Monetary Fund to hammer out the details of a package of austerity measures expected to slash state state spending and increase revenues .

The most controversial issue in the new memorandum between cash-strapped Greece and its international lenders is the reduction of the over-inflated public sector through constitutional amendments that will make it easier for the government to fire civil servants.

According to a report by Kathimerini daily, the government will be laying off surplus staff at state-owned companies and services, who, however, will receive 60 percent of their basic salary over a 12-month transition period in which they will assigned to a so-called reserve force.

A further shake-up to the civil service foresees extensive staff transfers following evaluations by the Supreme Council for Personnel Selection (ASEP).

Other measures laid out in the reform program relate to changes in taxation, the slashing of social security benefits and pensions, and new regulations to boost employment among young people.

Reforms in labor laws are expected to bring more flexibility to the job market as well as to allow the employment of young people on short-term contracts for wages below the present-day minimum.

Among the taxation measures being discussed are a minimum tax for the self-employed, a hike in heating oil taxes and changes to the scale of contribution in the so-called ?solidarity tax,? which will be reduced for pensioners and wage-earners and offset by an annual 300-euro contribution from self-employed who declare less than 12,000 euros.

Incentives are also outlined in the memorandum for the repatriation of capital.

The aim of the memorandum is to reduce Greece?s deficit to 2.5 percent of GDP by 2014 through a reduction of state expenditure by up to 10 percent of GDP in the next five years.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.