Greece: Low Earners To Be Taxed

Associated Press/Time
June 24, 2011

Greece's beleaguered government said Thursday it will start taxing minimum-wage earners and encourage local banks to help the state delay debt payments for bonds maturing as late as 2015.

The announcement came as the government reached a final deal on a euro28 billion ($40 billion) austerity package with debt inspectors from the European Union and the International Monetary Fund. Getting the new spending cuts, economic reforms and privatizations through parliament next week is a precondition for Greece to get more aid, without which it will default on its massive debts.

The deal reached between the Greek government and the debt inspectors, which regularly check on Greece's implementation of its euro110 billion bailout program, contains an additional euro3.8 billion ($5.4 billion) in spending cuts, an EU official said early Friday.

The experts from the EU and the IMF found that the austerity package to be sent to parliament initially fell short off the promised euro28 billion in savings, but that the Greek government promised to offset the shortfall with additional cuts, the official said. The official was speaking on condition of anonymity because the cuts have not yet been announced.

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