Greek citizens are facing a greater austerity push after the parliament approved further measures by a vote of 152 out of 153 deputies.
The move was in advance of a meeting of eurozone finance ministers this week and was approved only after a heated three-day debate in parliament.
Greek parliamentarians appear to be pinning their hopes that the finance ministers will also discuss debt relief for which the country has been asking. It is believed that these hopes were behind many deputies voting in favour when many had previously rejected the proposals.
Ultimately, the government is in a difficult position as many had once pledged to eradicate austerity and now the country is heading into even harsher measures.
The additional measures aim to bring in a fresh €1.8 billion in taxes, including a new tax on coffee and luxury goods, and the upping of VAT to 24%.
A new privatisation mechanism, stewarded by EU officials, will sell off some 71,500 prime public properties in order to raise collateral for the €250 billion bailout loans Greece has already had since 2010.
Earlier this month, the government endorsed cuts to pensions as well as other reforms which could bring in €5.4bn.
The Greek economy has seen its economy seize up by more than 25% since the outbreak of the debt crisis in 2008. Higher taxes are a likely disincentive for investment. Consequently, there are reasonable concerns that Greek citizens will not be able to pay the higher indirect taxes, property taxes and income taxes and that targets and deadlines will be missed.
But Athens is obliged to take some actions in advance of an economic review which will determine its further bailout potential. Greece has to find €3.5 billion in debt repayments this summer and is struggling.
It has even been pushed by the EU and the IMF to adopt yet tighter austerity if fiscal targets are missed. The IMF believes the overall Greek debt of some €321 billion is unsustainable, but EU member states are reluctant to agree to reduce any of the country’s debt.
Addressing parliament on Sunday, Tsipras insisted it was a huge achievement that Greece had finally succeeded in putting the debt issue on the table.
Comments
Yet witness all the absurdity in Portugal being unearthed daily before us! Consider Portuguese Banks, which along with a functioning Judicial and Policing system are the very bedrock of any modern economy. All Portuguese banks including the CGD, the State Bank itself, being total failures. Due to zero effective regulation valued for investors as rubbish.
And Portugal's Judicial and Policing systems ? Don't ask ! The Courts having a back log of 4 million cases (10 times Greece's whose lawyers have already been on strike 5 months!) and a Police force so demoralised at having to overlook the illegalities of 1/5th of the population, whatever they are doing, that one in three are having counselling.