As expected, the Greek bailout package has been finalized and announced. German taxpayers will be footing the biggest portion, about $25 billion, of the $110 billion Euro package.
You will hear people talk tough about how stringent requirements have been put on Greece in order to get the money.
Just so you get an idea of the level of “tough” measures that are being debated here, the German news magazine Speigel has a list of cuts that the Greek prime minister has agreed to (I will translate here):
- An 8% cut on public sector salaries
- Elimination of the 13th and 14th month salaries for public sector employees
- A freeze in public sector hiring
- An 8% cut on public sector benefits
- Lifting the number of employment years required for eligibility for full public sector pensions from 37 to 40
- Elimination of the Christmas bonus and the 14th month pension
- A hike in the value added tax from 21% to 23%
- New taxes on tobacco and alcohol
- A lifting of restrictions on layoffs in the private sector
I mean, doesn’t this stuff just blow the mind?? Greek public sector unions are taking to the streets and burning cars over an elimination of something like “13th and 14th month salaries”, “fully guaranteed pension eligibility after now still 40 (!!!) instead of previously 37 (!!!) years”, an elimination of the “14th month pension payment” (while of course still keeping the 13th month one).
On top of that, Greek taxpayers are being asked to foot the bill for the remaining gap via the broadest possible tax hikes.
These are all things that should never have existed in the first place. These are not concessions, they are a move from mind-blowing, sick, vile lunacy to still complete madness!
And to take to the streets over this kind of stuff? What do you think is going to happen once these plans, too, prove completely unsustainable and everyone acts surprised and rushes back to the table?
What a mess!