Monday 11 December 2017

Where the axe is falling in other European countries

Patricia McDonagh

Greece: The government has pledged to make drastic spending cuts and boost tax revenue in return for a €110bn bailout from the EU and IMF.

It has started drawing on the bailout money because a sharp downgrade of its debt rating made its borrowing costs soar.

Under the plan, the Budget will be slashed by €30bn over a total of three years.

Romania: The government proposed wage cuts of 25pc and pension cuts of 15pc in July in order to reduce the country's budget deficit.

Romania's economy shrunk more than 7pc in 2009 and it needed an IMF bailout in order to meet its wage bill. It needs to implement new austerity measures to qualify for the next instalment of the €20bn IMF loan.

Portugal: The socialist government has announced a range of austerity measures aimed at cutting the deficit to 7.3pc this year and 4.6pc in 2011.

Top earners in the public sector, including politicians, will see a 5pc pay cut. VAT will rise by 1pc and there will be income tax hikes for those earning more than €150,000. By 2013, they will face a 45pc tax rate.

Italy: The government has approved austerity measures worth €24bn for the years 2011-2012. The cuts amount to 1.6pc of Italian GDP

For the next three years, there will be a freeze on public sector pay and cuts in public sector hiring, replacing only one employee for every five who leave. Public sector pensions and local government spending are also targeted.

Spain: The Spanish government has approved an austerity budget for 2011 that includes a tax rise for the rich and 8pc spending cuts.

Government workers face a pay cut of 5pc, starting in June, and salaries will then be frozen for 2011 -- and a tax rise of 1pc will be applied to personal income above €120,000.

Irish Independent

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