Full speed ahead for austerity with privatizations on idle!

Angela Merkel is asking for immediate privatizations and our government has promised to carry them out, but the economy team has not made any decisions or prepared a list of assets available for utilisation. Over the next few days it will continue to seek advisors who will submit proposals and studies, something which it is supposed to have been doing since... last September, as minister Giorgos Papakonstantinou assured us six months ago.

The loss of time and income, however, in the current conditions of sedimentation of the real economy, requires that the Government revert to austerity measures.

Given that it is seeking additional measures of 15 billion euros by 2014, it is planning to step up the enforcement of some of these measures during this year as well, to fill the gap of income and expenditure targets in the first two months.

The relevant decisions will be made at meetings in the coming days, ahead of the arrival of the Troika head in Athens in early April. The first measures that will be implemented earlier than expected are already being discussed.

Initial thinking by the economy team involves finally initiating the implementation of the New State Payroll in the autumn of 2011 rather than early 2012, along with the measure for the imposition of income and property criteria on the payment of social allowances.

The government is expecting 4.5 billion euros from this Payroll, which will be “clipping” benefits and bringing about changes on several levels. The application of income and property criteria to social benefits is expected to bring in another 4.5 billion. Up to 8.8 billion is expected from simplifying the tax system, which includes the “clipping” of tax cuts, measures against tax fraud and the tightening of confirmation data.

However, even these measures are not sufficient to cover the financial risks already calculated at 1,7 billion euros for this year, while the deepening of the crisis could increase demands even further.