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Greeks await fresh economic pain Greeks await fresh economic pain
(about 1 hour later)
The Greek government is set to announce a third round of tax rises and spending cuts totalling 4.8bn euros ($6.5bn; £4.4bn) to ease its financial crisis. The Greek government has approved a third round of tax rises and spending cuts to ease its budget crisis, Prime Minister George Papandreou says.
A rise in sales tax and petrol and diesel tariffs is expected, as well as a move to cut holiday bonuses paid to civil servants. Details of the package, designed to save a reported 4.8bn euros ($6.5bn; £4.4bn), will be revealed later.
PM George Papandreou has likened the budget crisis to a "wartime situation". A rise in sales tax and petrol tariffs is expected, as well as a move to cut holiday bonuses paid to civil servants.
The EU has called for further austerity measures amid fears that Greece's problems could undermine the eurozone. The EU had called for austerity measures amid fears that Greece's problems could undermine the eurozone.
ANALYSIS By Malcolm Brabant, BBC News, Athens In a country with Byzantine financial practices, one of the more idiosyncratic traits of Greek employment law is the requirement that workers receive their annual remuneration in 14 segments.ANALYSIS By Malcolm Brabant, BBC News, Athens In a country with Byzantine financial practices, one of the more idiosyncratic traits of Greek employment law is the requirement that workers receive their annual remuneration in 14 segments.
The methods vary, but in principle, employees get a full month's extra wages at Christmas, an extra half month's salary to help during the summer holiday period, plus another half month's salary at Easter.The methods vary, but in principle, employees get a full month's extra wages at Christmas, an extra half month's salary to help during the summer holiday period, plus another half month's salary at Easter.
The bonuses carry great symbolic value in Greece, but the European Commission has urged the government to scrap them for civil servants.The bonuses carry great symbolic value in Greece, but the European Commission has urged the government to scrap them for civil servants.
Some of the cabinet have been reluctant to do so, not least because of strong opposition from trades unions. The unions fear that any reduction in the bonuses will not be just for the duration of the crisis but will be permanent.Some of the cabinet have been reluctant to do so, not least because of strong opposition from trades unions. The unions fear that any reduction in the bonuses will not be just for the duration of the crisis but will be permanent.
The main civil service union has called a 24-hour strike on 16 March.The main civil service union has called a 24-hour strike on 16 March.
There have already been strikes by trades unions in protest against the Athens government's cost-cutting plans. Mr Papandreou, who has likened the budget crisis to a "wartime situation", told reporters: "These decisions are necessary for the survival of the country and the economy, so that Greece can exit the vortex of speculators and defamation, so that we can breathe and keep on fighting."
There have already been strikes by trades unions in protest against the government's cost-cutting plans.
The socialist government has pledged to reduce Greece's budget deficit from 12.7% - more than four times the limit under eurozone rules - to 8.7% during 2010.The socialist government has pledged to reduce Greece's budget deficit from 12.7% - more than four times the limit under eurozone rules - to 8.7% during 2010.
It also also seeking to reduce its 300bn euros ($419bn; £259bn) debt. It is also seeking to reduce its 300bn euro ($419bn; £259bn) debt.
"We find ourselves in a wartime situation, faced with the negative scenarios affecting our country," Mr Papandreou told the parliamentary group of his Socialist Party (Pasok) ahead of a cabinet meeting to discuss the latest measures.
He said that Greece had to avoid "a nightmare of bankruptcy" in which the state would not be able to pay salaries or pensions.
Mr Papandreou has used some dramatic phrases to describe Greece's fiscal problems over the past few months, but this was his most alarmist to date, the BBC's Malcolm Brabant in Athens says.
It is believed that sales tax will rise by two percentage points, that petrol and diesel tariffs will be increased for the second time in a month and that luxury goods will be subject to a special duty.It is believed that sales tax will rise by two percentage points, that petrol and diesel tariffs will be increased for the second time in a month and that luxury goods will be subject to a special duty.
EARLIER MEASURES Public sector salary freezeRetirement age risePetrol, alcohol and tobacco tax risesCrackdown on tax avoidance Euro rises on new Greek measuresEARLIER MEASURES Public sector salary freezeRetirement age risePetrol, alcohol and tobacco tax risesCrackdown on tax avoidance Euro rises on new Greek measures
The government is reportedly planning to cut the annual holiday bonuses paid to civil servants, our correspondent says. The government is reportedly planning to cut the annual holiday bonuses paid to civil servants, the BBC's Malcolm Brabant in Athens says.
Trades unions have warned that removing the bonuses would be a "declaration of war".Trades unions have warned that removing the bonuses would be a "declaration of war".
Economy Minister Louka Katseli has warned that the measures have to be socially just.Economy Minister Louka Katseli has warned that the measures have to be socially just.
Businesses in Greece are likely to react badly to further tax increases, as they see them as being counter-productive, discouraging consumer spending and contributing to a further downward spiral, our correspondent adds.Businesses in Greece are likely to react badly to further tax increases, as they see them as being counter-productive, discouraging consumer spending and contributing to a further downward spiral, our correspondent adds.
Will you be affected by the measures? Are you in the civil service in Greece? If you have information you would like to share with us, you can contact us by using the form below:Will you be affected by the measures? Are you in the civil service in Greece? If you have information you would like to share with us, you can contact us by using the form below:
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