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Brussels wants an increase in VAT and excise duty on fuels and decrease of public sector wages

08 January 2010 / 09:01:27  GRReporter
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Representatives of the European commission, who are in Athens since yesterday, are offering to increase the Value Added Tax and the excise duty on fuels as well as to decrease the wages and the supplements in the public sector in order to restore the balance in the Greek economy. In the second day of the visitation of the financial experts it became clear that the reforms of the PASOK government are in the right direction. From Brussels however are suggesting additional measures for the Greek double problem – the high levels of the state deficit and the foreign debt.

A responsible employee of the Ministry of finance said in front of journalists: “I will not deny and I will not confirm any information about the suggestions made by our European colleagues about the changes in the Program for stability and development or the 2010 Budget.” Regardless of that people who are acquainted with the situation are saying that European financial experts are very unsatisfied with the lack of initiative in the effective decrease of expenses in the public sector, which is considered to be the most important measure to be undertaken in order to restore the economic stability of the country. Until now the government took responsibility to increase the tax rates in the corporate taxation, in order to increase the income of the national treasury. This however will suffocate the attempts of the same government to attract new capital and investments in the internal market and will not lead to the desired “warm up” of the market climate in the country.

In an unofficial conversation with journalists, representatives of the Ministry of economy, development and merchant marine said that the suggestions of Brussels are a reform of the existing Law for public investments. This includes facilitating the terms for applying for the programs of the National Strategic Framework for Development (ESPA), assistance of the small and medium enterprises, development and expansion of production of the country and increase of the competitiveness of the local market comparing to the international market conditions. As a particularly important factor it is mentioned the need of increase of production of the country and the increase of export which is a major factor for the increase of competitiveness of Greece.

According to other sources from the Ministry of finance the ambition of Prime Minister George Papandreou is in a three years plan the Greek economy to achieve full rehabilitation and progress. Currently the Greek financial experts forecast a positive economic growth in the beginning of 2011 and a real decrease of the foreign debt at the end of 2012. The aim of the visitation of the European experts in Athens is to make sure that the Greek government will do everything in their power to avoid a complete economic collapse.

The results of the three days conference between the Greek and the European experts will be announced in an official report which will clarify up to what extent the Greek government is ready to meet the expectations of their European colleagues for serious and responsible changes in the economic policy of the country.

Tags: EconomyMarkets European Union
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