The Greek government has unveiled
an austerity budget that aims to cut its 2011 public deficit to 7.4% of the
nation’s annual economic output or GDP.
If achieved, this would mean a
5bn-euro ($6.8bn; £4.3bn) reduction on Greece’s projected 9.4% deficit for
2010.
Under the budget plans, the
government will cut health and defence spending, and increase the sales tax on
most retail items from 11% to 14%.
Greece
had to accept a 110bn-euro ($150bn; £93bn) rescue deal in May.
This sum – which is being given to
the country in three stages – has come from the European Union and
International Monetary Fund.
To get the money, Greece had to agree to enforce substantial
spending cuts to reduce both its public deficit and overall government debt,
which are among the largest in Europe.
The country’s finance department
also said that the Greek economy would contract by 4.2% this year and by a
further 3% in 2011, higher than its previous estimate of a 2.6% slowdown next
year.
The budget also reveals that the
Greek government is to sell stakes in state-owned companies, and even four
Airbus A340 planes that it owns.
The sale of organisations to be
partly or fully privatised included rail operator Trainose, mining firm Larko,
gas operator DEPA, and defence group Hellenic.
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