Ruth Mitchell

Greece set for harsh reforms

This week Greece is set to implement a series of tough reforms under the conditions of their bailout by the European Union and the IMF, Reuters reports.

These changes will further anger the Greek population, as for many the idea of foreign intervention in the country is very unpopular. Eurogroup chairman Jean-Claude Juncker has warned that Greece could lose its sovereignty under the new economic conditions and jobs would almost certainly be lost.

These comments could trigger more protests in the stricken country, which is currently in its worst recession since the 1970’s, and 40% of youths are unemployed.

Last week the Greek government passed austerity measures worth 28 billion Euros, and promised to deliver a further 50 billion Euros in sell-off revenues by 2015. Public utilities are set to go under this scheme – an idea which is sure to cause public anger.

EFG Eurobank economist Platon Monokroussos said: “Greece now needs to push faster fiscal adjustments and structural reforms.”

“On the privatisation front, it is of essence the government delivers fast results to send a strong signal to financial markets.”

The socialist government must also now begin to sell off state property, as well as reforming a chronically inefficient tax system. The most unpopular reform however seems to be further pay cuts in the public sector, which have already seen civil servants salaries reduced by an average of 15%.

Alongside the rescue package, EU officials will now look towards private creditors who could be involved voluntarily so rating agencies do not declare the rescue a “credit event”.

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