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The measures against which Greeks are protesting

06 November 2012 / 14:11:18  GRReporter
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The Greek government has officially announced the final version of the fiscal adjustment measures that the special economic committee in parliament is considering on Tuesday. The vote on them will take place at midnight on Wednesday. They finally cancel the payment of the three bonuses for Christmas, Easter and summer holidays in the public sector. They reduce on a scale the salaries of public workers to 27% and pensions to 25%. Retirement age will increase to 67 from 65 years previously and by the end of the year, the first two thousand public workers will be officially dismissed.

The main fiscal adjustment measures include:

- Reducing the pensions between 1,001 and 1,500 by 5%, those between 1,501 and 2,000 euro will be cut by 10% and those exceeding 2,000 euro will be cut by 15%. Pensions up to 1,000 euro will not be reduced

- Paying the "Social Solidarity" allowance (EKAS) to the pension not at the age of 60 but at the age of 64 years

- Parents of children who are unable to work and are of legal age (disabled or children with mental retardation) will not receive an update of the allowances

- Imposing a ceiling of 720 euro on pensions of unmarried women whose fathers worked in the public sector during their lifetime. If unmarried women have another income, it should not exceed 8,640 euro a year, so that they can receive the aid after the death of the father. (Unmarried women whose fathers were not lucky enough to work in the public sector are not entitled to such privileges).

- Repealing for the period 2013-2016 the additional payment to the salaries of all public workers relating to the achievement of administrative goals set. So far, the people employed in public enterprises, public administration, tax offices and local government organizations have received an additional bonus to their salary if they do the tasks set on time.

- Cutting the salaries of chairmen of mayoral and municipal councils by 50%

- Cancelling the bonuses and the additional pension of advisers in temporary committees in local government organizations and in parliament

- Reducing the additional remuneration of the members of the municipal councils and municipal enterprises by 50%

- Reducing the salaries of general secretaries in the ministries to 3,450 euro

- Limiting the basic salaries of special secretaries in the ministries to 3,000 euro

- Cutting the salaries of independent control bodies of the public administration by 20%

- Cancelling the additional fees of lawyers and attorneys of the public administration and state-owned companies that will pay them fixed salaries

- Introducing the unified payroll table in all areas of public administration with the exception of state-owned companies, which are listed on the Athens Stock Exchange

- Reducing the salaries of policemen, firemen, port workers, public health and military defence workers on a scale by 2% to 35% retroactively from 1 August 2012

- Freezing appointments in city halls and municipalities by 2016

Innovations will be introduced in the Greek tax system, which in the last three years has been supplemented, modified and burdened with various new taxes. The registration of businesses will definitely change from next year onwards, but the plan for the reform has not yet been announced. What we know so far is:

- Increasing the excise duty on fuel oil used for agricultural activities to 66 euro per ton from 26 euro per ton, which has been applicable so far

- Increasing the excise duty on LPG

- Increasing the excise duty on cigarettes by up to two euro per pack depending on the brand

- Reducing the return of VAT to farmers to 6% from the 11% that has been applicable so far

The government continues to slide over the subject of direct cuts in the public sector. Under the fiscal adjustment plan, various ministries will be entitled to shift public workers from next year onwards. They will be transferred from jobs that are being closed to areas in need of additional staff and will continue to receive the salary they received at their previous job. Alternatively, unnecessary officials should be included in the "labour reserve". It allows them to receive slightly over 75% of their salary for one year until the opening of a new job suitable for them. If such a job is not opened the employees included in the reserve will be permanently dismissed and they will have to seek employment in the private sector.

Some Greek political analysts comment that those appointed in public administration without a competition are expected to be the first to be included in the labour reserve. Others consider this scenario unlikely because appointments in the public sector through a political decision were the main tool of the government to win voters in recent decades. The last decision relating to the close public administration is that for every five dismissed or retired people may be appointed one new public worker who has passed the test for the particular position.

The state will cut the single financial allowances that employees receive at retirement. The reductions will be in the range of 2.21% and 83% but they will not apply to pensioners, who have submitted their documents, have been approved but have not yet received a pension. The lowest will be cuts of single payments of workers in the steel industry. The highest reductions will come to bear on retiring construction entrepreneurs who performed government contracts.

Tags: MarketsEconomyFiscal adjustmentGreeceCrisis
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