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19 November 2012

Reuters: Greece imposes spending controls to appease lenders


Greece approved laws on Monday to enforce budget targets and ensure that privatisation proceeds are used to pay off debt, seeking to appease foreign lenders before a critical meeting of eurozone finance ministers.

The government decrees - which go into force immediately and do not require parliamentary approval - stipulate proceeds from privatisation go into a special escrow account and impose automatic cuts on public sector units that miss budget targets. One of Monday's decrees requires money from selling state assets to be paid within 10 days into the escrow account at the Greek central bank, set up under the country's second bailout deal with the European Union and IMF last March.

It also imposes curbs on public sector borrowing from 2014 and sets up automatic spending cuts or tax hikes if budget targets are missed. A second decree cuts the pensions of parliamentary workers, who nearly derailed a vote on austerity measures this month by walking out, forcing the government to hastily withdraw an amendment that would have cut their pay.

Full article



© Reuters


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