Breakdown Of Greek Austerity Measures

[Ares]

For those asking, here is a full breakdown of the actual proposed fiscal measures to be implemented if the mid-term austerity vote passes tomorrow, courtesy of the BBC.

The Greek parliament is debating the latest set of austerity measures, which it needs to pass to qualify for another payment under the bail-out from the European Union and the International Monetary Fund. The five-year plan was changed last week to allow for more money to be raised through tax increases and less money to be saved through spending cuts. The plan involves cutting 14.32bn euros ($20.50bn; £12.82bn) of public spending, while raising 14.09bn euros in taxes over five years.

These are some of the austerity measures planned.

TAXATION

Taxes will increase by 2.32bn euros this year, with additional taxes of 3.38bn euros in 2012, 152m euros in 2013 and 699m euros in 2014.
A solidarity levy of between 1% and 5% of income will be levied on households to raise 1.38bn euros.
The tax-free threshold for income tax will be lowered from 12,000 to 8,000 euros.
There will be higher property taxes
VAT rates are to rise: the 19% rate will increase to 23%, 11% becomes 13%, and 5.5% will increase to 6.5%.
The VAT rate for restaurants and bars will rise to 23% from 13%.
Luxury levies will be introduced on yachts, pools and cars.
Some tax exemptions will be scrapped
Excise taxes on fuel, cigarettes and alcohol will rise by one third.
Special levies on profitable firms, high-value properties and people with high incomes will be introduced.

PUBLIC SECTOR CUTS

The public sector wage bill will be cut by 770m euros in 2011, 600m euros in 2012, 448m euros in 2013, 300m euros in 2014 and 71m euros in 2015.
Nominal public sector wages will be cut by 15%.
Wages of employees of state-owned enterprises will be cut by 30% and there will be a cap on wages and bonuses.
All temporary contracts for public sector workers will be terminated.
Only one in 10 civil servants retiring this year will be replaced and only one in 5 in coming years.

SPENDING CUTS

Defence spending will be cut by 200m euros in 2012, and by 333m euros each year from 2013 to 2015.
Health spending will be cut by 310m euros this year and a further 1.81bn euros in 2012-2015, mainly by lowering regulated prices for drugs.
Public investment will be cut by 850m euros this year.
Subsidies for local government will be reduced.
Education spending will be cut by closing or merging 1,976 schools.

CUTTING BENEFITS

Social security will be cut by 1.09bn euros this year, 1.28bn euros in 2012, 1.03bn euros in 2013, 1.01bn euros in 2014 and 700m euros in 2015.
There will be more means-testing and some benefits will be cut.
The government hopes to collect more social security contributions by cracking down on evasion and undeclared work.
The statutory retirement age will be raised to 65, 40 years of work will be needed for a full pension and benefits will be linked more closely to lifetime contributions.

PRIVATISATION

The government aims to raise 50bn euros from privatisations by 2015, including:
Selling stakes this year in the betting monopoly OPAP, the lender Hellenic Postbank, port operators Piraeus Port and Thessaloniki Port as well as Thessaloniki Water.
It has agreed to sell 10% of Hellenic Telecom to Deutsche Telekom for about 400m euros.
Next year, the government plans to sell stakes in Athens Water, refiner Hellenic Petroleum, electricity utility PPC, lender ATEbank as well as ports, airports, motorway concessions, state land and mining rights.
It plans further sales to raise 7bn euros in 2013, 13bn euros in 2014 and 15bn euros in 2015.

http://www.zerohedge.com/article/bre...erity-measures

[keehah]

For those asking, here is a full breakdown of the actual proposed fiscal measures to be implemented if the mid-term austerity vote passes ...

PRIVATISATION

The government aims to raise 50bn euros from privatisations by 2015, including:
Selling stakes this year in the betting monopoly OPAP, the lender Hellenic Postbank, port operators Piraeus Port and Thessaloniki Port as well as Thessaloniki Water.
It has agreed to sell 10% of Hellenic Telecom to Deutsche Telekom for about 400m euros.
Next year, the government plans to sell stakes in Athens Water, refiner Hellenic Petroleum, electricity utility PPC, lender ATEbank as well as ports, airports, motorway concessions, state land and mining rights.

A large amount of North American Ports have already be sold, leased, run by or in debt to to foreign investors, mainly one that NeoCons are now on slow-burn trying to rave up war with.

But is this a new low? Leasing a cities streets! To fund the cities lavish public servants pensions of course.


Forbes: Forget Pension Obligation Bonds. Two Cities Are - No Joke - Leasing Their Streets To Fund Pensions.

It sounds preposterous, and the headline of a recent article here at Forbes by Marilyn Cohen is certainly eye-catching: “The Lunacy Of Using City Streets To Collateralize New Municipal Bond Deals.” And these aren’t just any municipal bond deals — two cities in California are issuing bonds with their own city streets as collateral to pay down their unfunded pension liabilities.

In West Covina, the city council voted to do so on July 7, as reported at the San Gabriel Valley Tribune. The city, a suburb of Los Angeles with a population of 100,000, a median household income of $71,200, and nearly $200 million in pension liabilities, is using the proceeds of $205 million in debt to pay off its own debt to CalPERS.

Likewise, according to the East Bay Times, the city of Torrance, also in suburban Los Angeles, population 150,000, median household income $80,900, pension debt $500 million, will issue $350 million in bonds. (See the formal report of the recommendation and the minutes of the July 28 city council meeting.)

Now, it turns out, they’re not turning their streets into toll roads, or giving bond-buyers the ability to “foreclose” or take control either now or in the future.

They’re using a bond-issuing mechanism called “lease revenue bonds.” We’re all used to cities paying for public works, stadiums, and the like by issuing bonds which are paid off by a dedicated revenue source — sewer bills, hotel taxes, etc. But lease revenue bonds are different. Here’s the layperson’s description at Charles Schwab:

“Lease revenue bonds are a unique structure in the muni market. Instead of issuing long-term debt, like general obligation bonds do, to finance improvements on a public facility, the municipality may enter into an arrangement that uses lease revenue bonds. Often a trust, not the municipality, issues bonds and generates revenues to pay the bonds back by leasing the facility to the municipality. The municipality will generally appropriate money during each budget session to meet the lease payment.

Heck once everyone is riding bicycles, only eight foot wide streets are needed for two bike lanes that can double as a single lane for delivery and moving trucks and city vehicles.

Think of the funds to city employees if all the rest of the street is leased and sold for new pack and stack housing!