Greece outlined deep spending cuts and tax increases Sunday to free up a multi-billion-euro rescue by the International Monetary Fund and European Union, the first bailout for one of the 16 countries using the euro.
The measures, which include tax increases and salary and pension cuts for civil servants, aim to reduce the budget deficit to below 3 per cent of gross domestic product by 2014, from the current 13.6 per cent of GDP, Finance Minister George Papaconstantinou said.
“We are called on today to make a basic choice. The choice is between collapse or salvation,” he said.
The full amount of the three-year IMF/euro-zone package will be announced in Brussels after an emergency euro-zone finance ministers’ meeting, where Mr. Papaconstantinou was heading after his Athens news conference. He said the amount would be “close to” widely reported figures. French and other officials have said it would be 120 billion euros.
Budget cuts (OK, if….) and tax hikes (Ugh!). that should certainly work well. Greece is headed for the ditch with Europe to follow. Hopefully, we’ll learn from the Greek’s misfortune and not go down the same ruinous path.