Greek Prime Minister George Papandreou’s surprise Oct. 31 call for a referendum on the country’s latest bailout will give angry Greek citizens their first chance to vote on proposed austerity measures.
The measures are necessary for the Greek government to meet terms of the most recent European plan to resolve the country’s debt crisis. Its debt is estimated to be five times that of Argentina at the time of that country's default in 2001.
If the referendum gives the bailout a green light, Greece would receive 130 billion euros from the European Union and the International Monetary Fund. Greece received its first infusion of 110 billion euros in May.
The outcome of the referendum is uncertain, as the proposed austerity measures have sparked intense public outrage in Greece. The most recent plan includes civil service pay cuts, job and pension cuts, higher taxes and a 50-billion-euro privatization plan across a wide range of enterprises, ranging from ports to utilities to the state lottery.
In 2010, the Greek government spent 12 per cent more than it collected in revenues. The aim of this package is to balance the federal budget by 2014.
Nearly two-thirds of Greeks say they are against the bailout terms as they stand. Here's a complilation of figures on the austerity packages, as cited in media outlets including the Guardian, the BBC, the New York Times and Athens News.
- Public sector wages to be cut by 20 per cent, and wages of state-owned enterprises to be cut by 30 per cent
- 30,000 civil servants to be put on partial pay — meaning 60 per cent of regular pay for one year
- Monthly pensions above 1,000 euros to be cut by 20 per cent; monthly pensions at the same level for existing retirees under 55 to be cut by 40 per cent
- Health spending to be cut by 310 million euros ($432.2 million Cdn) in 2011, a further 1.8 billion euros between 2012 and 2015
- Education spending to be trimmed through merging or closing of 1,976 schools
- Defence spending to be cut by 200 million euros in 2012, and 333 million every year from 2013 to 2015
- The tax-free income threshold to be lowered from 12,000 to 5,000 euros
- In an effort to raise money for the growing number of unemployed, the country is to introduce a "solidarity levy"" of between one and five per cent per household, which will be raised twice in 2012
- Taxes on gas, cigarettes and alcohol to increase by one third; luxury taxes to be levied on items like pools and yachts
- The rates for the value-added tax (VAT) — similar to Canada's HST — to increase
- Selling 10 per cent of Hellenic Telecom to Deutsche Telekom for 400 million euros
- Selling stakes in various banks, utilities, ports, airports and land holdings in 2011/2012