Greece adopts new austerity measures

May 24, 2011 at 4:01 PM
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ATHENS, Greece, May 24 (UPI) -- The Greek government has announced it is holding a yard sale, as it moves to unload assets, raise taxes and cut services in an ongoing austerity program.

The government said it would sell 10 percent of its stake in telecommunications company OTE, 17 percent of its holdings of the Public Power Corp. and 34 percent of the Hellenic Postbank, the EUobserver reported Tuesday.

In addition, Athens said it had agreed to a combination of tax hikes and spending cuts that amounted to $8.4 billion or about 2.4 percent of the country's gross domestic product.

European economy Commissioner Olli Rehn said he believed Greece would fall short of its long-range goal of trimming its assets by $70.6 billion.

"We estimate that meaningfully Greece cannot privatize 50 billion euros worth of its assets in the course of the coming years, which represents more than 20 percent of its GDP," Rehn said in a meeting in Vienna.

Tax hikes approved in Athens in the latest round of austerity measures include a sales tax jump from 13 percent to 23 percent on some items and new taxes on natural gas.

Employers will be assessed an additional 1 percent on social security charges and pensions above $2,400 per month will be assessed a new fee, the newspaper said.

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