Finance Minister Giorgos Papaconstantinou defended on Friday the government?s latest round of austerity measures, saying they were absolutely necessary to help Greece reduce its deficit.
?We must urgently reduce our deficit and produce primary surpluses… So it is obvious that we must have a midterm program,? Papaconstantinou said as he began presenting the new plans, which include a range of tax hikes.
?When you take corrective measures, some people will lose money. There’s no doubt about this. But we are trying to do this in the fairest possible way,? he said. ?When you wade across the river, you get wet, many people get wet. But you can’t stop in the middle, or the current will carry you away.?
The minister said cuts would also be made to defense spending, and that over the next few years 150,000 staff would be reduced from the civil service, which has about 700,000 staff. A hiring ratio of one new hire for every 10 departures will be adopted.
?The main thrust of this effort is structural in nature, changing the way the public sector works and its structure.?
Papaconstantinou said the government was considering submitting a new tax bill in September cutting VAT and corporate taxes, which New Democracy has demanded for some time. The minister said that cross-party working groups would be set up to discuss the taxation issues.
“We begin this discussion now and we will invite other parties to participate,» he said.