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Posts Tagged ‘austerity’

Thousands of Irish protest austerity cuts

In Uncategorized on November 27, 2010 at 1:51 pm

Thousands gathered in Dublin for a mass protest Saturday against savage cutbacks needed to obtain an international bailout for debt-ravaged Ireland, heaping more pressure on the embattled government.

An Irish policeman (L) is confronted by protestors as they break through the front gates of the Irish Prime Minister’s office in Dublin, Ireland.

Police said they expected about 50,000 people to join a march against the four-year austerity package announced on Wednesday by Prime Minister Brian Cowen, aimed at slashing Ireland’s huge budget deficit.


Up to 3,000 people gathered at the start of the protest, holding placards saying “Eire not for sale, not to the IMF”.


“The cuts are not necessary. The banks are being rescued, not Ireland. The banks should take the hit — cut them loose,” said Marian Hamilton, 57, who was attending the protest with her seven-year-old grandson.


The demonstration will pile more pressure on Cowen the day after his Fianna Fail party suffered a humiliating by-election defeat which cut the FF/Green Party coalition’s parliamentary majority to just two.


Cowen has been fighting off calls from opposition lawmakers to quit, insisting he must see through the austerity package and a budget due on December 7 because they are pre-conditions for the bailout.


European Union heavyweights Germany and France are urging a rapid conclusion to negotiations on the EU and International Monetary Fund loans, reportedly worth up to 85 billion euros (113 billion dollars).


Sources in Brussels said the talks, aimed at shoring up Ireland and stopping the crisis spreading to other troubled eurozone countries, would likely wrap up Sunday in time for an announcement before markets open Monday.


Media reports suggest Ireland might be charged 6.7 percent interest on the nine-year loans, significantly more than the 5.2 percent rate charged to fellow eurozone country Greece when it was bailed out earlier this year.


The 15-billion-euro austerity package will cut the minimum wage and slash 25,000 public sector jobs as Ireland strives to bring its deficit under three percent of gross domestic product by 2014. It is currently at 32 percent.


Irish Congress of Trade Unions president Jack O’Connor, the head of Ireland’s biggest union SIPTU, said it was “the harshest budget since the foundation of the state”.


“This is the result of allowing speculators, bankers and developers to run riot, pillaging and ruining our economy,” he said.


Ireland’s national sovereignty was at stake, he said, adding: “We must not stand idly by while the final nail is driven into the coffin.”


Hundreds of police officers and a helicopter were mobilised for Saturday’s march through Dublin city centre to the General Post Office, the highly symbolic site of the declaration of Irish independence in 1916.


Cowen’s government has insisted that Ireland’s austerity plan and next month’s budget are crucial steps to show fellow members of the 16-nation euro area that it is putting its finances in order.


He refused to go to the polls until lawmakers have passed the measures, not likely before January, but opposition parties have said he no longer has a mandate to govern.


In Friday’s by-election in Donegal, the opposition socialist Sinn Fein party took what was once a stronghold of Cowen’s Fianna Fail party.


Labour Party leader Eamon Gilmore said the party “has neither the political mandate nor the moral authority to make the crucial decisions the country now faces.”


The Irish Times said the budget would probably go through given the pressure from the EU and the IMF, but added: “There is a general consensus that Mr Cowen’s days are numbered.”


Meanwhile Michael Noonan, finance spokesman for the Fine Gael main opposition party, described reports of the 6.7 interest rate on the bailout loan as “very disturbing”.


“This rate is far too high and is unaffordable on any reasonable projection of growth,” he said.


 

Source: SGGP

Ireland unveils 15-bln-euro austerity plan to secure bailout

In Uncategorized on November 25, 2010 at 5:20 am

DUBLIN, Nov 25, 2010 (AFP) – Ireland unveiled a 15-billion-euro austerity package Wednesday required to unlock an international bailout, slashing public sector pay and pensions but refusing to raise corporation tax.


With the eyes of Europe on his debt-ridden nation, Prime Minister Brian Cowen said his four-year package of cuts and tax increases would restore shattered confidence, calling it a signpost on the road to recovery.

A women looks at works of art for sale from the Bank of Ireland auction in the Shelbourne Hotel in Dublin, on November 24, 2010. AFP

“We can and we will pull through this as we have in the past,” Cowen told a news conference.


“We are a smart, resilient, proud people and we are going to come through this challenge because we love our country.”


The 20-billion-dollar plan, to be followed by a budget on December 7, is an essential step towards Ireland receiving a bailout of up to 85 billion euros (114 billion dollars) from the European Union and the International Monetary Fund.


The aim is to slash the public deficit to below three percent of gross domestic product, in line with EU rules, after it ballooned to 32 percent of GDP this year.


Among the key points of the package, sales tax will be raised to 23 percent from 21 percent by 2014, but the 12.5-percent corporation tax rate — a key attraction for foreign companies to invest in Ireland — will be maintained.


The government said it expected unemployment to be brought below 10 percent by 2014, from its current level of over 13 percent.


The minimum wage will be cut by one euro to 7.65 euros an hour, but the government said it would still be one of the highest rates in the EU.


The EU’s economic commissioner Olli Rehn said the package was “a sound basis for the negotiations” on the international bailout.


As Ireland strove to prove it was trying to get its house in order, another heavily-indebted eurozone country, Portugal, was paralysed by a general strike on Wednesday called to protest against deep spending cuts.


The EU fears Portugal will be the next eurozone nation to require a bailout after Greece and Ireland.


Chancellor Angela Merkel said Germany was prepared to help Ireland, but its support was conditional on Dublin “making clear what steps (it) must take to get back on a path of stabilisation”.


Cowen meanwhile fought off calls from the opposition Tuesday to call a snap election, insisting the budget must be passed first.


Irish lawmakers are unlikely to vote on the budget until January, meaning that an election could not take place until February or March.


The EU has told the main Fine Gael opposition party that while the plan’s fiscal targets are non-negotiable it will re-negotiate specific details with an incoming government, finance spokesman Michael Noonan said.


Noonan insisted the plan was “disappointing in its poverty of ambition and detail.”


Experts warned that the plan would not immediately ease Ireland’s problems.


“Uncertainty caused by the collapse of the government… will continue to hang over Ireland in the coming weeks,” National Irish Bank economist, Ronnie O’Toole, said.


IHS Global Insight economist Sonia Pangusion predicted “the downtrend in consumer confidence will accelerate,” adding that the plan for an export-based recovery “increases Ireland’s economic risk.”


The government has been under pressure since caving in and agreeing to accept the bailout on Sunday night.


Despite reports that it is worth 85 billion euros, Cowen told parliament earlier Wednesday the amount had still to be decided as negotiations were ongoing.


The international loans to Dublin are in part intended to shore up banks left with huge debts from the collapse of an overheated property market.


But the bailout is also designed to stem fears of contagion in other eurozone nations such as Portugal and even the far larger Spanish economy, which came under pressure on the markets.


Spain’s deputy finance minister Jose Manuel Campa insisted that “an abyss separates us from Ireland”.


Despite the efforts to shore up the single European currency, the euro fell slightly below 1.34 Wednesday after sinking below 1.33 dollars earlier because of fears over the eurozone and the Korean crisis. 

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Source: SGGP

Britain to unveil severe austerity plan

In Uncategorized on June 22, 2010 at 12:31 pm

(AFP file) A woman walks past a vacant shop in Cheshire, north-west England.

LONDON (AFP) – Britain’s new coalition government is expected to unveil big cuts in public spending and significant tax increases in its first budget due Tuesday, after inheriting a record public deficit.


Chancellor of the Exchequer George Osborne will deliver the Conservative-Liberal Democrats’ budget to parliament at 1130 GMT after the coalition took power following last month’s general election.


Osborne confirmed Sunday that his emergency budget would include a levy on banks.


“What I’m determined to do is to make sure that the measures are tough but they’re also fair,” Osborne told BBC television.


“What we’re clear about is that all parts of society are going to have to make a contribution.”


Meanwhile, preparing millions of public sector workers for savage cuts, Prime Minister David Cameron said it was “fair” that they should face a squeeze on pay and pensions.


“There is no way of dealing with an 11 percent budget deficit just by hitting either the rich or the welfare scrounger,” he said in a weekend interview with The Times newspaper.


Osborne was reportedly ready to announce a freeze in welfare benefit payments.


But the opposition Labour party, ousted at the May 6 general election after 13 years in power, warned moving too swiftly to make cuts could endanger a fragile economic recovery.


“We have to be very cautious about the rate at which money is taken out of the British economy,” said the party’s finance spokesman Alistair Darling.


Osborne is seeking to save tens of billions of pounds as state borrowing is forecast to reach 155 billion pounds (230 billion dollars, 185 billion euros), or 10.5 percent of gross domestic product (GDP), in the year to March 2011.


Britain’s public deficit had rocketed to a record-high of 156 billion pounds in the 2009/10 fiscal year which ended in March, as severe recession hit tax revenues and as the government spent billions of pounds on bailing out banks.


Reports late Monday meanwhile said Osborne’s announcement will include a sweetener in a bid to draw some of the poison from the toughest budget in decades, with the rate at which people start paying tax rising by 1,000 pounds.


The move, which was heavily trailed in the British media, will mean that nearly 900,000 people earning less than 7,475 pounds a year will pay no tax, said the BBC.


Deputy Prime Minister Nick Clegg warned in a message to his Liberal Democrat supporters the day before the budget that it would be “one of the hardest things we will ever have to do.”


“But I assure you, the alternative is worse: rising debts, higher interest rates, less growth and fewer opportunities.”


The government said last week that it had decided to axe or suspend projects planned by the former Labour government that would have cost about 11.0 billion pounds.


The coalition had already announced plans in May to cut spending by about 6.2 billion pounds in 2010/11.


Osborne is also expected to unveil tax increases in Tuesday’s budget. Media reports suggest that he will raise VAT — a tax on goods and services — to 20 percent from 17.5.


The chancellor is also set to raise capital gains tax — or profits from the sale of assets such as second homes — and introduce a levy on banks.


Britain’s economy is predicted to grow by only 2.6 percent in 2011 as it recovers from a record recession that ended late last year, according to the Office for Budgetary Responsibility (OBR), an independent fiscal watchdog set up by the new government.


That compared with a 3.25-percent expansion forecast by the previous Labour government.

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Source: SGGP

French protest as Europe implements austerity

In Uncategorized on May 28, 2010 at 5:12 am

European governments on Thursday pressed ahead with radical cost-cutting plans in a bid to tackle a debt crisis, as financial markets rallied and thousands protested in France against pension reforms.


The Spanish parliament passed by just one vote an unpopular raft of austerity measures to contain overspending, including a reduction in pay for civil servants, a freeze on most pensions in 2011 and a cut in child benefits.


It was feared that a government defeat could have forced new elections and added to jitters among investors over the poor state of public finances in Spain, which just scraped out of a long recession in the first quarter.


Meanwhile in France, tens of thousands of people turned up for rallies across the country called by trade unions in protest against the government’s plans to raise the official retirement age from 60 in a bid to cut debt.

A person holds a banner of CGT trade-union during a demonstration in Lille, during a nationwide day of strike called by unions to protest against the pension overhaul.

And during a visit to Germany on Thursday, US Treasury Secretary Timothy Geithner said Europe should follow China’s lead and boost economic growth since US consumers can no longer support the global economy alone as in the past.


“If the world is going to grow at its potential then we are going to have a more balanced pattern of growth globally,” Geithner said, following talks with his German counterpart Wolfgang Schaeuble in Europe’s biggest economy.


Referring to the current debt crisis, he added: “We all understand and we all agree that part of global recovery… is to commit to clear objectives for reducing our fiscal positions to sustainable levels over the medium term.


“We are going to get there at somewhat different paces, the magnitude of adjustment will differ, as we all come to this from different positions, with different underlying growth rates, different overall debt burdens,” he added.


Alongside Greece, Portugal and Spain — all of whom have seen their borrowing costs rise sharply in recent months as investors fret over their solvency — other EU members like Italy and Britain are slashing spending.


Germany and France are preparing to follow suit. Plans announced by the French government to raise the official retirement age to 60 brought tens of thousands of people into the streets of Paris on Thursday.


On average French men retire even earlier at 58.7 years and women at 59.5 — lower than in other developed nations — and as France has one of the world’s longest life expectancies, workers can spend a quarter century in retirement.


Europe’s deficit-cutting drive had a visible effect on financial markets on Thursday, with London’s FTSE-100 index jumping up 3.12 percent, the Frankfurt Dax rocketing 3.11 percent and the Paris CAC rising 3.42 percent.


Market sentiment was also helped by optimistic US and a positive outlook for the world economy from the OECD, as well as China’s sharp rebuttal to a report that it might reduce its holdings of eurozone government debt.


But high deficits and debt in some of the weaker EU economies remained centre stage on the world economic map, with Padhraic Garvey, a debt analyst at Dutch bank ING, warning: “We remain in a very difficult set of circumstances.”


Also causing some concern was new data from the United States showing the US economy — the world’s largest — grew slightly less than initially estimated in the first three months of the year at 3.0 percent from the previous quarter.


The earlier estimated had put growth at 3.2 percent. The downward revision surprised most analysts, who predicted gross domestic product — a broad measure of the country’s goods and services output — had expanded 3.3 percent.


“This is a fairly tepid recovery that is fighting a lot of headwinds,” said Joel Naroff of Naroff Economic Advisors.


“It will be hard to grow rapidly when the economy has to overcome limited credit availability, a modest recovery in housing, high unemployment rates and as a consequence depressed consumer confidence … and uncertainty in Europe.”

Source: SGGP

Italy approves 24 billion euro austerity drive

In Uncategorized on May 26, 2010 at 1:22 pm

Britain faces aggressive cuts in ‘age of austerity’: minister

In Uncategorized on May 22, 2010 at 5:15 pm

Britain faces an “age of austerity” as the new coalition government readies aggressive cuts in public spending to slash the deficit, Treasury minister David Laws told the Financial Times on Saturday.

Chief Secretary to the Treasury, David Laws, speaks during a news conference. (AFP Photo)

Laws, chief secretary to the Treasury in Prime Minister David Cameron’s coalition, will outline plans on Monday to make 6.0 billion pounds (6.9 billion euros, 8.7 billion dollars) of cuts in the current 2010/2011 year.


“We are moving from an age of plenty to an age of austerity in the public finances,” Laws told the FT in his first newspaper interview since taking office on May 12.


“We will make that austerity as progressive as we can, by protecting the things and the people who need protecting.”


Laws, who is a Liberal Democrat, added that he was “mentally prepared for getting a lot of representations from angry people” when the cuts are made.


Cameron, whose Conservatives are in an unlikely alliance with Deputy Prime Minister Nick Clegg’s Lib Dems, has made a key priority of tackling the deficit amid mounting concern about soaring debt levels in the eurozone.


Britain’s public finances have been ravaged by enormously expensive banking-sector bailouts, and a record-length recession that has slashed taxation revenues and ramped up expenditure.


In a rare piece of good news, revised data showed Friday that the deficit hit 156.1 billion pounds in 2009/2010, or 11.1 percent of GDP. That was lower than the previous estimate of 163.4 billion pounds — but was still a record.


“I haven’t quite worked out whether this is a dream or a nightmare,” Laws told the FT on Saturday, adding that the government was facing a choice between “the unpalatable and the disastrous” in its bid to balance the books.


Finance minister George Osborne, who is a Conservative, will meanwhile unveil an emergency budget on June 22.


“The budget is going to have to set out, in a really credible and decisive and aggressive way, the action that we’re going to have to take to reduce the deficit,” Laws said.


He added: “I do think that people … will understand that the public finances are in a complete mess, that we can’t just go on building up debt, not only because it risks the economy but it lands on future generations.


“And I think people understand that there are no easy choices and while people won’t want to see big cuts in certain areas of public spending, they don’t want to see vast increases in taxation either.


“They understand that George and I, and the government, have got a really difficult job to do, to reconcile these things.”


 

Source: SGGP

Spanish government approves tough austerity plan

In Uncategorized on May 21, 2010 at 9:15 am

MADRID, May 20, 2010 (AFP) – The Spanish government Thursday approved a 15-billion-euro (18.8-billion-dollar) austerity plan aimed at reining in the huge public deficit, as thousands of workers protested against the measure.


The plan was approved at a cabinet meeting as public sector workers took to the streets to vent their fury at the measures, which include a five percent pay cut for civil servants.


Unions have also called a strike of civil servants for June 8.


Deputy Prime Minister Maria Teresa Fernandez De la Vega acknowledged that approving the measures, which must still be passed by parliament, “has not been an easy decision to take” but the government “is also aware that it is not easy to accept.”


“We are confident of the understanding of all because these are necessary and essential measures which a responsible government had to face while thinking of the future of all,” she told a news conference after the cabinet meeting.


Socialist Prime Minister Jose Luis Rodriguez Zapatero, under pressure from both Spain’s EU partners and the markets, announced the austerity measures last week in a bid to shore up Spain’s public finances after fears it could follow Greece into a debt crisis.


The cuts are on top of a 50-billion-euro austerity package announced in January designed to slash public deficit to the eurozone limit of three percent of gross domestic product by 2013 from 11.2 percent last year.


The latest measures include an average five-percent pay cut for public sector workers from June, and a pay freeze from 2011. Pensions except for the poorest will also be frozen in 2011.


The government also plans to scrap a 2,500-euro payout to parents for the birth of children, a key part of Zapatero’s social platform to boost Spain’s flagging birth rate.


The salaries of Zapatero and government ministers will also be cut by 15 percent and those of secretaries of state by 10 percent.


“It is a great effort thanks to which we will undoubtedly return to the path of growth,” de la Vega said.


Finance Minister Elena Salgado said the pay cuts would lead to savings of 2.3 billion euros in 2010 and 2.2 billion in 2011.


The pensions freeze will save some 1.5 billion euros in 2011 and the birth payment around 1.25 billion.


She said the cuts also mean the government has lowered its 2011 growth forecast from 1.8 percent to 1.3 percent.


Spain entered recession in the second quarter of 2008 as the global financial meltdown compounded a crisis in the property market, which had been a major driver for growth in the preceding years.


Official data Wednesday showed the economy scraped out of recession in the first quarter, boosted by a rise in exports and household spending, but analysts have warned that any pick-up could be short lived.


The recession has sent the unemployment rate soaring to more than 20 percent in the first quarter.

Migrant workers perform during a protest marking the 24-hours general strike against the austerity measures in central Athens, Greece on May 20, 2010. AFP photo

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Source: SGGP

Greek unions call fresh protests ahead of austerity vote

In Uncategorized on May 6, 2010 at 4:36 pm

Greek unions mobilised Thursday for new demonstrations against draconian austerity cuts as the government raced to push the unprecedented measures through parliament a day after deadly rioting.

A protest near the Parliament building in the center of Athens.

The main unions called their members to new protests from 6 pm (1500 GMT) undeterred by the deaths of three people, reportedly including a pregnant woman, in a firebombed Athens bank the previous day when demonstrations degenerated.


Condemning “the fires, blind violence, vandalism”, the million-member GSEE private sector union said in a statement “we are determined to pursue and extend our struggle to meet our fair demands.”


As the government insisted it would not back down on the austerity drive, eurozone leaders scrambled to keep Greece’s debt crisis from spreading to other highly indebted countries like Spain and Portugal


The European Central Bank held one of its most crucial meetings ever in Lisbon to rein in the Greek debt crisis while eurozone leaders prepared to meet on Friday in Brussels to contemplate the future of their embattled bloc.


As unions prepared for a fresh round of demonstrations, Greek lawmakers were debating the government spending cuts and tax hikes with voting on the legislation due to begin in the afternoon.


Finance Minister George Papaconstantinou told parliament the austerity drive, which eurozone countries and the IMF have demanded in return for a bailout, was the only option.


“The only way to escape bankruptcy is to accept the aid money, which reaches 110 billion euros… and the precondition is to agree on the three-year austerity plan,” Papaconstantinou said during the debate.


Average Greeks voiced sadness and bitterness in the streets of central Athens as the nation was still reeling from the shock killing of the bank workers.


“I’m sad and I’m angry because those people who threw the Molotov cocktails don’t respect the lives of other people,” said Chris, a 30-year-old who works for a small private company and who participated in the demonstrations.


Anita, who works in a bank not far from the bank that caught fire, said that the firebombing blamed on young hooligans was “the saddest thing that could ever happen to Greece”


“I was working in my bank, we saw the fire, it could have happened to me”,” she said. “This has nothing to do with the protests, the demonstration was peaceful.”


As protestors marched on Wednesday against the government’s plans to avert national bankruptcy and the strike shut down much of the country, some demonstrations turned violent.


Demonstrators tried to storm the parliament and hooded youths hurled petrol bombs at stores and businesses in central Athens, prompting police to respond with tear gas and charges.


Police said two women and one man died at a branch of the Marfin bank which caught fire after rioters broke a window and threw Molotov cocktails inside.


One of the women who died was four months pregnant, according to doctors quoted by the Greek press.


At least two other buildings — the Athens prefecture and one used by tax officials — caught fire after other firebomb attacks on the margins of the protests.


The general strike was the first major test of the Socialist government’s resolve to push through unprecedented measures since agreeing to a 110 billion euro (143 billion dollar) EU and IMF debt bailout at the weekend.


Officers arrested at least 12 people in Athens and another 37 in the northern city of Thessaloniki, where protestors also targeted stores and banks in the city centre before riot police dispersed them.


The violence in Athens sparked concerns on global financial markets that Greece’s huge bailout could veer off course and that its debt crisis could engulf other countries.


The euro dived to the lowest level for more than one year as the deadly protests in debt-plagued Greece cast a shadow over the future of the eurozone and the single currency, dealers said.


Moody’s ratings agency on Thursday warned that the fallout from the Greek debt crisis presented a risk of “contagion” for the credit rating of banks in Britain, Ireland, Italy, Portugal and Spain.


Spain helped investors immediate fears of contagion after the government successfully raised 2.345 billion euros in the country’s first debt sale since its credit rating was cut last week.


 

Source: SGGP

Greece rushes austerity cuts as anger builds

In Uncategorized on May 3, 2010 at 12:32 pm

A man passes by a shop window in downtown Athens. (AFP photo)

ATHENS (AFP) – Greece’s socialist government rushed on Monday to push through parliament a fresh round of spending cuts in the face of public anger at the price to pay for the 110-billion-euro international bailout.


Greek Prime Minister George Papandreou has insisted the austerity package was essential to secure the joint eurozone-International Monetary Fund rescue package.


But Greek unions have vowed to battle the drastic round of austerity measures, worth some 30 billion euros (40 billion dollars) that include deep cuts to wages and pensions.


Union leaders have flagged up a general strike Wednesday as the first stage in resistance to the government’s austerity programme.


The government is to present the new austerity measures to parliament late Monday or Tuesday and aims to get a vote on Wednesday or Thursday at the latest, an official said.


Newspapers said the day after the cuts were unveiled that they marked the end of an era in Greece and beginning of years of painful sacrifice.


“Our way of life, of working, consuming and organising our lives in this part of the Balkans is finished since yesterday,” the pro-governmental Ta Nea newspaper said in an editorial.


The main headline of the independent left-leaning Eleftherotypia read “Four years without a breath…”


Papandreou, in a speech to his cabinet Sunday, made it clear the cuts would run deep: but he was clear too about what he believed was at stake.


“I know that with the decisions today our citizens must suffer greater sacrifices,” he said.


“The alternative however would be catastrophe and greater suffering for us all.”


The 110-billion-euro bailout to dig Greece out of its debt crisis is bigger than the deal agreed to salvage bankrupt Argentina in the 1990s.


European governments endorsed the deal at a meeting of finance ministers in Brussels on Sunday, although the parliaments of some of the 16 eurozone countries involved, notably France and Germany, still need to approve it.


The first installment of the eurozone-IMF rescue package would then be paid within the next few weeks, with the rest spread over three years and conditional on the cuts and tax rises in Greece.


That should mean the first payment will be in the Greek coffers ahead of the May 19 deadline for nine billion euros of debt repayments.


IMF managing director Dominique Strauss-Kahn said Sunday that the Fund’s executive board was set to approve its part of the deal, 30 billion euros, within the week.


“The authorities’ program is designed with fairness in mind,” he said of the government’s cuts. It would include more progressive taxation; a clampdown on tax evasion with closer checks on the rich.


Athens would also exempt the most vulnerable from cuts in wages and pensions, said Strauss-Kahn. And there would be a “significant reduction” in military spending.


But Yannis Panagopoulos, president of the million-member strong GSEE union, denounced the government’s plan as the “most unfair and hardest measures in the modern history of Greece”.


The austerity plan would only “worsen the recession and plunge the economy into a deep coma”, he warned.


“It’s time to step up the social battle, our May 5 general strike will be the beginning of a long battle.”


In exchange for emergency loans, Greece has agreed the new cuts over three years with the aim of slashing the public deficit to less than three percent of output by 2014, from 13.6 percent last year.


Finance Minister George Papaconstantinou said the government would scrap 13th and 14th month bonus wages for public sector workers and pensioners; raise the retirement age for women from 60 to 65, bringing it in line with that for men; and raise the sales tax from 21 percent to 23 percent this year.


Rocked by violent street protests at home, Greece has been under heavy pressure to cut a massive public deficit that has shaken the euro, rattled markets and sparked fears of contagion to other debt-ridden European countries.


But the euro slipped and Asian stocks tumbled in thin trading on Monday on doubts about the bailout.


The single European currency bought 1.3224 dollars at 0350 GMT in Asia, down from 1.3294 late in New York Friday, paring back early gains that saw it climb as high as 1.3332 dollars.


The European Central Bank meanwhile suspended criteria for Greek debt it accepts as collateral for loans of central bank funds, a major boost for the Greek government and banks.


The move, which is to remain in effect “until further notice”, means that banks in Greece and elsewhere will be able to keep getting ECB cash loans using government bonds and other marketable debt instruments as collateral despite their ratings by international agencies.

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Source: SGGP