(Greece) – Greece’s current bailout expires in 2018 and the current Greek government is saying that after that, they want fewer austerity measures. Since the first bailout, which was enacted in 2010, Greece has had to implement stringent austerity measures such as higher taxes, pension cuts, and salary cuts. Despite the fact that the current government was elected on a promise of ending austerity, Greece just received its first payment from their third bailout this past week after the government implemented more austerity measures. This third bailout is set to expire in a few years. George Chouliarakis, Greece’ Alternate Finance Minister, said that the government will comply with the required austerity measures that they agreed on to receive their badly needed funds. However, he also said that after the bailout expires, they want to cut taxes once again in a move that he feels is necessary to get the country back on track.
Greece must stay on track and implement austerity measures and also achieve fiscal targets in order to continue to receive funds. Greece has said that they will maintain a 3.5% surplus target after 2018, Chouliarakis would much prefer if they lower their goal to around 1.5-2% surplus after 2018 when the bailout deal expires. He said, “There is a desperate need to put taxes, and especially corporate taxes, on a sustainable path, well below where they are now.” Since the current government was reelected, taxes have increased considerably on things like coffee and tobacco and the country’s sales tax was also increased to 24%. Further austerity measures, such as civil salary cuts and pension cuts, have also been a requirement.
Back in 2010, Greece was locked out of bonds markets and shortly after that, they signed on for their first bailout and total, the funs have come to more than 200 billion euros in loans. Austerity has been controversial because while the international creditors have said that Greece needs to cut government spending and increase their revenue, the austerity measures that were implemented because of that have also worsened the recession and contributed to a rise in the country’s unemployment rate. The surplus targets have also been controversial, especially between the European Union, who thinks that the targets are logical, and the International Monetary Fund, who believes that they are goo ambitious. Greece is hoping to see a decrease in their surplus expectations after the commitments attached to the bailouts ends.