what would be the effects of bellow Greek austerity measures if they were to be effected in kenya.
The Greek parliament is preparing to vote on further
austerity measures to try to meet its terms for another
payment under the bail-out from the European Union and
the International Monetary Fund.
The five-year plan was changed 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. It will be raised twice next year.
The tax-free threshold for income tax will be lowered
from 12,000 euros to 5000 euros, rather than the
original plan of 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 steadily to shrink
it by more than 2bn euros by 2015.
Nominal public sector wages will be cut by 20%.
Wages of employees of state-owned enterprises will be
cut by 30% and there will be a cap on wages and
bonuses.
The number of civil servants to be suspended on partial
pay will rise to 30,000 by the end of this year, from
20,000 planned initially. They will receive 60% of pay for
one year, having been promised a job for life.
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.
Monthly pensions above 1,000 euros to be cut by 20%
Existing retirees aged under 55 to lose 40% of any
pensions over 1,000 euros.
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.
LABOUR MARKET REFORM
The law will make it easier for companies to cut their
payroll costs. It will do this by suspending industry-wide
wage bargaining.