Greece mulls more wage cuts

ATHENS: Greece is considering deeper cuts in public sector wages and further tax increases on a range of products and professions to convince its creditors to disburse more aid, Greek newspapers said on Saturday.

The Greek cabinet will on Monday discuss a new mid-term fiscal and privatisation plan, which must be convincing enough for the EU and the IMF to continue bankrolling the debt-laden country.

The plan may include scrapping bonuses to civil servants and employees in state-run companies, Greek newspapers Ta Nea and Isotimia reported, without citing any sources.

The government may also lower or scrap tax-free thresholds on property holdings and the self-employed, raise consumption taxes on soft drinks and certain fuel types or shift a range of products to a higher VAT-band, other newspapers said.

Greece is under pressure from its creditors to take more fiscal measures and speed up privatisations, after disappointing budget figures for January-April suggested it will miss the deficit targets set under its bailout programme for a second consecutive year in 2011.

In order to receive a fresh batch of EU/IMF aid, on top of the 110 billion euros it secured last year, Greece plans to put up state property as collateral, one newspaper said.

"This will happen by ceding state assets to Special Purpose Vehicles (SPVs) listed in Luxembourg and subject to English law," newspaper Kosmos tou Ependyti said without revealing its sources.

Finance Minister George Papaconstantinou pledged on Friday to speed up the country's 50-billion euro privatisation programme, a key element in the country's effort to exit its crisis without a debt restructuring that would shake the euro.

Copyright Reuters, 2011