Debt: Greece Cuts Mean Protests and Strikes

Eurozone Debt Crisis Worsens

Eurozone Debt Crisis Worsens

Protests are expected to occur in Greece as the government has promoted tougher spending cuts. Currently, public transport staff and taxi drivers are undergoing a 24-hour protest. Public sector workers will also occur today.

Spending Cut Plan

The measures proposed include more cuts to pensions, higher levels of property tax, and job cuts for public sector employees. This austerity plan has occurred in order for the country to meet the severe demands proposed by the Troika (the IMF, the European Central Bank, and the European Commission), in order to meet financial targets and gain money for a further round of bailouts.

The decision came after discussions with the international lenders, who said that bailout funds would only be given if Greece met the fiscal conditions. Under the austerity plans, civil servants who are suspended and put onto partial pay will increase by 50% to 3,000 employees by the end of this year. In addition, monthly pensions higher than 1,200 euros could be cut by 20%. Those pensioners under 55 will also see a cut in pensions, with 40% cut for pensions higher than 1,000 euros a month.

Surrounding Parliament

After yesterday’s six hour cabinet meeting, protesters numbering in the thousands surround the Greek parliament building. Additionally, two of the country’s largest unions agreed to strike action. The anger and resentment comes from the belief that the spending cuts seem to be making the recession worse, increasing unemployment and offering less help.

The measures will mean another eight billion euros to help with the country’s deficit problems. This equates to £6.9 billion. The country is struggling amid fears that it will default on its loans and markets have been volatile and all over the place since the fears began. The government hoped that the austerity measures and the subsequent bailout plan would mean the country would remain “at the core of the eurozone” and help the country to remain on track from now until 2014.

However, some experts believe that the country’s debt is too large not to default. Financial markets have remained volatile and share prices have decreased, with the euro falling fast as well, meaning the country could struggle further.

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