Greece is set to outline more austerity measures in order to secure a bailout installment. The installment is crucial in avoiding the Greek coffers from running dry. Greece has said it will run out of money in October. The Greek cabinet in Athens was meeting to consider major public sector layoffs, pay and pension cuts, and tax increases. International lenders in return for an 8 billion euro rescue loan vital to pay state salaries and bills in October. A Greek government spokesman said measures negotiated in talks with European Union and IMF officials would be announced in the afternoon, after the special cabinet session.
Greece is leading the way in the euro zone sovereign debt crisis. Ireland and Portugal are not too far behind. The crisis is also threatening Italy, Spain, and some of Europe’s largest banks.
The International Monetary Fund said the crisis has increased European bank’s exposure by 300 million euros. The Global Financial Stability Report issued by the IMF said, “Risks are elevated and time is running out to tackle vulnerabilities that threaten the global financial system and the ongoing economic recovery.”
The prospect of more tax increases and spending cuts are likely to be met with huge concern by the Greek people in a country mired in a deep recession, where the number of unemployed is rising to around one in seven. “We have to take supplementary measures, because of the recession, because of the difficult task, and the weakness of the central administration have not produced the required results,” Evangelos Venizelos said in Parliament just ahead of the Cabinet meeting.
A recently announced new property tax to be paid through electricity bills has been met with resistance. State electricity company unionists have threatened not to collect the tax and not to cut off electricity to those who refuse to pay.
Repeated rounds of spending cuts has the public furious and showing no patience with measures that appear to have no effect on the country’s budget. Analysts are warning that as the country faces its fourth year of recession and unemployment well above 16%, more austerity measures could finally sink the country financially.