More Taxes, More Sacrifices From 2012-2015

Sacrifices of over 16 billion euros, with new increases in taxes and cuts in wages, is a result of Greece’s updated Medium Term plan for four years from 2012 to 2015 from the Troika. The new Med. Term released by the Greek Treasury holds additional measures of up to 13.74 billion euros for 2013-2015, which so far remain unclear. The aim is to collect around 53-56 billion euros a year from taxes. Direct taxes on income are projected to increase by 3.6 billion euros in 2012.

Smaller incomes (mainly due to recession and less from tax cuts), are expected in 2013-2014, when direct taxes are reduced to around 22.5 billion euros while they will explode up to 24 billion euros in 2015.

An “Axe” will drop on government spending, the operating costs of which are limited to 13.7 billion euros in 2015, against 17.5 billion euros in 2011. Utilities will continue to produce high deficits of about 572 million in 2012, 453 million in 2013, 396 million in 2014 and 388 million in 2015. Payments to employees will drop from 490 million this year to 460 in 2012, 380 in 2013, 275 in 2014 and 330 to 2015.

Social Budgets reveal that subsidies to pension funds will be decreased by 3.7 billion euros. The allocation of social security will lead to 13.7 billion euros in 2015, compared to 17.5 billion euros this year. The new Medium Term incorporates the relief of “haircuts” of 50% of bonds, the costs of interests are projected to fall to 13.2 billion euros in 2015 against 16.38 billion euros this year.

At the same time as the application of the Bond Exchange Program (PSI +) reduces the bond portfolio  by 50% of 206 billion held by banks and pension funds.


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