Greeks confront wave of new increases in taxes
Source: Agencies |
March 16, 2010, Tuesday
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Print Edition
Print Edition
A wave of new tax hikes hit Greece yesterday, raising the cost of consumer goods despite recession and high unemployment, as European Union finance ministers gathered in Brussels to discuss the country's debt crisis.
The center-left government has increased the main sales tax from 19 to 21 percent, as part of a 16 billion euro (US$22 billion) austerity package intended to cut the budget deficit by almost a third this year.
The tax hike raised the cost of fuel and most consumer goods and services, although many retailers have said they will try to minimize the effect on shelf prices.
Central Athens greengrocer Vangelis Tangalos said the sales tax increase would further damage weak sales.
"We're already 30 to 40 percent down," he said. "Now with the increase there will be even more of an effect," Tangolas added.
Greece will present the first results of its austerity measures at the EU ministerial meetings yesterday and today, and says it is looking for political rather than financial backing to pull through a crisis that has hammered Europe's common currency and alarmed global markets.
Both Athens and Berlin have dismissed media reports that the finance ministers would decide to extend financial aid to Greece. As Europe's largest economy, Germany would be deeply involved in any bailout, and has strongly resisted the idea.
EU officials said on Saturday the union has developed a set of options to help Greece, but Athens would have to arrange for possible loan pledges with each government.
Greece's finance ministry says the austerity program, which also involves civil service wage cuts and freezes on hirings and pensions, "appears sufficient" to meet budget saving targets.
The cutbacks have angered unions, which responded with strikes and demonstrations that were marred by extensive riots.
The center-left government has increased the main sales tax from 19 to 21 percent, as part of a 16 billion euro (US$22 billion) austerity package intended to cut the budget deficit by almost a third this year.
The tax hike raised the cost of fuel and most consumer goods and services, although many retailers have said they will try to minimize the effect on shelf prices.
Central Athens greengrocer Vangelis Tangalos said the sales tax increase would further damage weak sales.
"We're already 30 to 40 percent down," he said. "Now with the increase there will be even more of an effect," Tangolas added.
Greece will present the first results of its austerity measures at the EU ministerial meetings yesterday and today, and says it is looking for political rather than financial backing to pull through a crisis that has hammered Europe's common currency and alarmed global markets.
Both Athens and Berlin have dismissed media reports that the finance ministers would decide to extend financial aid to Greece. As Europe's largest economy, Germany would be deeply involved in any bailout, and has strongly resisted the idea.
EU officials said on Saturday the union has developed a set of options to help Greece, but Athens would have to arrange for possible loan pledges with each government.
Greece's finance ministry says the austerity program, which also involves civil service wage cuts and freezes on hirings and pensions, "appears sufficient" to meet budget saving targets.
The cutbacks have angered unions, which responded with strikes and demonstrations that were marred by extensive riots.
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