The 10 Toughest Greek Austerity Measures

If you think you’ve got it tough living in America, just be glad you’re not going to be in Greece as that nation begins to confront the true reality of austerity.

From a 15 percent cut in public wages to cigarette and alcohol taxes to Social Security reductions and means testing, the Greek measures will instill pain, necessary though it may be, for years to come.

Posted 29 June 2011
By Jeff Cox

Taxes will increase by 2.32 billion euros this year and 3.38 billion, 152 million and 699 million in the three subsequent years. There will be higher property taxes and an increase in the value-added tax (VAT) from 19 percent to 23 percent.

Luxury levies will be introduced on yachts, pools and cars and there will be special levies on profitable firms, high-value properties and people with high incomes.

Excise taxes on fuel, cigarettes and alcohol will rise by one-third.

Public sector wages will be cut by 15 percent.

Defense spending will be cut by 200 million euros in 2012 and 333 million each year from 2013 to 2015.

Education spending will be cut by closing or merging 1,976 schools.

Social Security will be cut by 1.09 billion euros this year, 1.28 billion in 2012, 1.03 billion in 2013, 1.01 billion in 2014 and 700 million in 2015. There also will be means testing, and the statutory retirement age will be raised to 65 from 61.

The government will privatize a number of its enterprises, including the OPAP gambling monopoly, the Hellenic Postbank, several port operations, Hellenic Telecom and will sell its stake in Athens Water, Hellenic Petroleum, PPC electric utility and lender ATEbank, as well as ports, airports, motorway concessions, state land and mining rights.

Only one in 10 civil servants retiring this year will be replaced and one in five in coming years.

Health spending will be cut by 310 million euros this year and 1.81 billion euros from 2012 to 2015.