Drastic Measures to Curb Budget Deficit - The Best from Greece

Minister heralds far-reaching reforms of tax and public spending as EU increases pressure to curb bloated deficit.
As the European Commission increases pressure on Greece to take drastic measures to curb its bloated budget deficit, Finance Minister Giorgos Papaconstantinou has told Kathimerini that the draft budget for next year envisages “far-reaching reforms in the tax system and public spending” with the aim of rescuing an economy that has been “stretched to its limits.”

According to Papaconstantinou, the proposed measures in the draft budget to be unveiled  include the abolition of tax exemptions currently enjoyed by MPs, judges and other privileged professions, reforms to the taxation of property, a possible increase in fuel tax and a crackdown on widespread income tax evasion. Public spending, too, is to come under the knife.

The minister stressed in the interview that these and other measures need to be taken to put Greece back on track. “The issue is not what the European Commission wants. It is what is needed if our country is to tackle the massive problems it faces,” he said.

But Brussels has exerted heavy pressure on Athens, demanding reforms of a permanent nature, as opposed to one-off measures, and suggesting that Greek compliance would win the government an extension for reducing its budget deficit which currently stands at over 12 percent of gross domestic product, compared to the 8 percent projected for this year by the previous, conservative government.Papaconstantinou said he aimed to trim the deficit “to single-digit level” over the course of next year. The minister added that the government plans to initiate a dialogue next month – under the watchful eye of Brussels – on thorny issues including pension reform and the curbing of privileges enjoyed by those working in “closed occupations,” such as notaries and truck drivers.
 

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