Meet Greek Austerity...At Long Last

Tyler Durden's picture

Well it seems the impending maturities of GGBs has forced the Greek's hands as they drag austerity measures into the here and now - and in dramatic manner.

 

*GREEK PENSION CUT FOR THOSE EARNING MORE THAN EU1,200 A MONTH

*GREECE TO REDUCE TAX-FREE THRESHOLD TO EU5,000 FROM EU8,000

*GREECE TO REDUCE PENSIONS BY 40% FOR THOSE UNDER 55

*GREECE TO CUT WAGES OF 30,000 STATE WORKERS THIS YEAR

*GREECE TO CUT PENSIONS OVER EU1,200 BY 20%: STATEMENT

 

And we note a helpful comment from Brazil's Mantega...

 

*MANTEGA SEES NO IMMEDIATE DANGER FOR GREECE

 

phew!

We will post the full statement as soon as it is released.

Source: Bloomberg

UPDATE: Full Statement Below:

 

STATEMENT BY MINISTER OF STATE AND GOVERNMENT REPRESENTATIVE Elias Mossialos

The Cabinet now refined the measures that lead to achieving the fiscal targets for 2011 and 2012 and allow the full implementation of the support of the Greek economy by 2014.

 

The discussions with the Troika will be completed - announced yesterday - after the arrival of the chief in Athens at the beginning of next week.

 

But it is absolutely essential given the country's strategic choice to make again a financial independent and equal country - member of the eurozone as soon as possible to reach a primary surplus. These options and send to our partners and markets the message that Greece and is willing and able to fulfill its obligations, remaining always the hard core of the euro and the European Union.
Since the Greek people should have a clear view for a number of issues that are the subject of uncontrolled speculation, the Government announced early today the clear framework of critical decisions:

 

A) The tax-free threshold is placed at 5,000 thousand euro, the average level of member eurozone.

 

B) The new pay scale - vathmologio is really unified, meritocratic, transparent and fair while giving incentives to increase productivity and efficiency of public administration and its executives.

 

C) There occurs no reduction in pensions of up to 1,200 euros. To achieve this will be cut 20% of the amount exceeding 1,200 euros in order to ensure proportionality and the internal justice system. Especially for retirees under 55 years until they reach the age of 55, will be cut by 40% portion of the pension that exceeds 1,000 euros.

 

D) The institution of labor redundancy will be applied to the end of 2011 to qualify for this 30,000 employees in Government and the wider public sector through the application of merit and transparent criteria under the supervision of ASEP to identify the truly overstaffed. This concerns a total of about 3% of workers in the public and broader public sector.

 

E) The Cabinet also took a series of decisions to promote structural changes and especially privatization, opening the professions and the labor market and the restructuring of the parastatal.

 

F) The national tax system that will be voted on until October to give a definitive end to a series of injustices and inequalities that prevail for decades and which undermine social cohesion and development of the country.

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SGS's picture

Riots in 3....2...1.....

Ahmeexnal's picture

Forget riots.

This is an outright declaration of war by the francogerman (via their puppet G-Pap) banking mafia upon the greek population.

Time for Greece to declare war on SarkoGela.

 

A Man without Qualities's picture

Load of bollocks.  The wages of public sector workers in Greece is often as much as 30% higher than in Germany.  When you actually work in out in terms of wages plus bonus and benefits per hour of work, it's more than double.  However, most public sector workers live in urban areas and the rents have risen dramatically, which is why they haven't seen a significant rise in standard of living.  Those who own the properties find ways of evading property taxes (you claim the property is unfinished) or paying tax on the rent (through dubious expenses claims). 

The problem for the Germans is they cannot intervene on domestic matters, such as tax code and collection standards, so the strategy is to make life unpleasant enough for the average citizen that they demand a change in the culture.

 

duo's picture

And we thought the Irish got boned.

1000 Euro/month isn't luxury by any means

something Freudian about Greece "remaining the hard core" of Europe

Judge Holden's picture

I don't get how the Greek government is still in power?  Why have their not been massive recall elections by the population?

agent default's picture

Riots serve to unleash anger.  It when you don't see riots in situations like these, that's when you should brace youself for outright war. 

I am going long 5.45x39 and RGD5

The Third Man's picture

"Woof, woof!!" ~ the greek riot dog

Anonsters's picture

Green for you, sir. Maximum green for Riot Dog.

MassDecep's picture

Yeah, Riots and then Compliance.

That is exactly how it will play out, here and there.

Keep watching that tv and listening to the spew. Your brain will conform, sooner or later. Or you die.....

Greece is the ant in the realm of elephants. Wait until French banks default in regards to Belgium obligations.

 

 

 

Nussi34's picture

The ratio colleted taxes / GDP is smaller in Greece than in Switzerland. What does this tell us? They pass laws and do not enforce them! So all this austerity is just on paper. Not even Excel savings, only ppt savings....

Moe Howard's picture

50% reduction in vaseline use between men and boys.

Bananamerican's picture

"one riot gyro coming up"

WoodMizer's picture

Does that come with teargas tzatziki and a molotov to wash it down?

Dreadker's picture

Sweet incentives to live in greece... So about a year from now we'll be replacing the word 'Greece' in the is article with 'USA' right?

Let them eat iPads's picture

40% less food stamps for all.

Joseph Jones's picture

Yeah, all the people we know collecting $1150 on SSI: dropping down to $1049 immediately! 

Mr Lennon Hendrix's picture

And Greece is still in the game!

cossack55's picture

Welcome to Debt Slavery dear Grecians.  One might consider a move to Sparta.  On second thought, Iceland would be a better move.

GeneMarchbanks's picture

Your new overlords(IMFecked) are here with a plan!

Spitzer's picture

If you think going back to the Dracma and taking the hit that way would be better, just ask the Wiemar Germans or the Zimbabweans.

Gold Man-Sacks's picture

It's going to suck, regardless.  But, that would be the only way to get out from the iron grip of the banksters.

pain_and_soros's picture

Opa!! I'll have some flaming cheese with that

johnconnor's picture

Harcore man, really hard core... grandpas being forced to take a 20% cut and return to the laboral market making 40% less... in the meantime Goldman Sach Greece will raise the Christmas bonuses for the architect of this disaster another 20%

KidHorn's picture

Nobody is taking a 20% haircut. The 20% applies to amounts over 1,200 euros. I would guess many pensioners wont get a cut at all.

This is going to accomplish next to nothing. It's no different than US politicians announcing cuts that sound impressive on the surface, but when digging into the details, aren't cuts at all.

johnconnor's picture

Okay, sure, nobody is going to get a nominal haircut of 20%, but you tell me how Grandpa Milos and his wife Elena, 67, on a 2000 euro pension, will survive with 1840 euros, after he has to pay the new "solidarity tax" on top of all the other taxes, leaving him with around 1400 euros when you are having near double digit inflation in Greece.

Judge Holden's picture

Double digit inflation?  I would think they'd be suffering from massive deflation?

johnconnor's picture

For food, I am just talking about food...

Nussi34's picture

Yes, but it is a bit difficult to spend significant amounts of money on food! Unless you want to weigh 200kg

Don Birnam's picture

Now apply those same cuts to both Congress and the Executive Branch.

fdisk's picture

Time to come back from sunny beach back to work at least

for few hours a week :)))

walküre's picture

Pensions for those UNDER 55????

Are we talking current pension payments or their planned pension payments?

If the first, how many Greeks UNDER 55 are eligible for pensions at this time?

WTF???????????

Dreadker's picture

I think its basically saying if you're under 55 forget about a pension... and if you're not born yet don't bother ;-)

scatterbrains's picture

put another way,  if your a Greek cop expected to hold back the rioters, it's time to mix gas cocktails in your basement with the peoples.

reload's picture

Must mean - projected pensions for those under 55 or `future entitlements`

After Italy, France Portugal etc etc have all been `bailed out` the above list will be aplied to all the citizens of Europe - in the interests of harmonisation. Except of course the beurocrats in Brussels will not have any of their fantastic, tax free, lifetime benefits reduced - at all.  

 

walküre's picture

I don't think so. It means that if you're pushing 55 and think you can retire, think again.

Let's wait for some clarification. The 20% cut on pensions over 1200 Euro is hardcore. I understand the reason behind it but that is a tough decision. That 20% cut is not going to come back into the economy which of course is the double whammy and the crux of all austerity.

Debugas's picture

i'd screw it and stop paying and accumulating at all

shadow economy will get a huge boost

Galen Slade's picture

Work 20 years, retire by 38 with a full pension.   Sounds good to me.  I could have retired about 20 years ago...  

DosZap's picture

Galen,@13:22

This is COMMON practice for US Police,Fire,Fed,etc,etc,etc....................

Start at 20, retire 100% bennies at 40, and start a second career at 40, for a double dip.

PaperWillBurn's picture

In the U.S you can get a pension much younger than that. Retired Military??

BrocilyBeef's picture

Ahh, finally my vacation to pleasant, quiet and sleepy GREECE!

I smell Greek Bullshit.

HpDeskjet's picture

Lol, these "words" will/can never be implemented. Anyway, default is postponed to december. This is all political theatre to give ECB/EU time to develop restructuring plan for the Greece (and EU) banking sector. The default will come this year.

tawdzilla's picture

just a matter of time until austerity finally makes its way to the US

alien-IQ's picture

glad to see all the worlds problems are fixed. what a relief huh?

wait a minute...do you smell that?...what's that smell?...it smells familiar...I'm sure I've smelled this before...yes i do know this smell...it's BULLSHIT!

lolmao500's picture

Time for a coup d'état. What the hell is the greek military doing? Military coups we can believe in.

edotabin's picture

Busy looking at Turkey who are there to remind them not to screw up the bankers plans.

This all encompassing.  You don't just say "haircut" and that's it. You don't just say "drachma" and "opa" and that's it. Should the Greeks revolt, leave the Euro etc. the bankers will make their lives a true, actual and literal hell.

Watch the correlation between how Greeks are progressing with the Troika and Turkish aggression.