In These New Times

A new paradigm for a post-imperial world

PM: ‘concerted attack’ against the euro

Posted by seumasach on February 10, 2010

9th February, 2010

Greek Prime Minister George Papandreou has warned that a “concerted attack” was underway against the euro, with Spain and Portugal now being targeted, after Greece.

Speaking to the press during an official visit to New Delhi, Papandreou said that he had warned of such an attack by speculators as early as the first EU summit he attended as prime minister, at which time he had stressed that Greece was not Europe’s problem and that speculators would find, after Greece, another “weak link” through which to attack the euro.

The premier stressed that the subsequent targeting of Spain and Portugal indicated that Greece is not an isolated case. The problem, he added, is a European and an international one, and coordinated action and solidarity are needed on this matter.

To a relevant question, Papandreou said that he intends to put the issue forward at his meeting on Wednesday with French president Nicolas Sarkozy and at the extraordinary EU summit the following day.

Finance Minister

Evidence of income criteria for everyone and cash registers everywhere were just two of the upcoming tax measures unveiled by Finance Minister George Papaconstantinou on Sunday, in an interview regarding the government’s planned tax reforms that was published by the Sunday edition of the newspaper “Ethnos”.

The minister repeated earlier announcements regarding the abolition of separate tax rates for certain sources of income and said the government intended to abolish early pension privileges and unfair salaries in the public-sector. At the same time, he stressed the need for everyone to contribute according to their means and to provide protection for those that were weakest.

He confirmed the abolition of a uniform property tax, to be replaced by a scaled property tax that would require those with major real estate holdings to pay the largest amounts, and emphasised the government’s determination to use every electronic means available to monitor and cross-check the tax statements submitted by tax payers.

On the planned pension reforms, the minister said that this was a major issue that addressed current inequities in the system:

“We are not the only ones who see that when a private-sector employee is required to retire at 65, after a perhaps difficult and harsh working life, and receives the pension he is entitled to from IKA he might feel offended when he sees special groups enjoying pensions several times larger at much younger ages,” Papaconstantinou pointed out.

During the interview, the finance minister also referred to Greece’s massive debt and deficit, pointing out that the country will have to borrow 54 billion euros from markets during the current year. He underlined that Greece had not submitted to the ‘dictates of the EU’ but was taking steps to comply with a set of rules that it had signed for when it joined the eurozone and was currently violating.

At the same time, the government had to act in order to protect the country’s economy at a time when borrowing conditions were extremely difficult, he added. Referring to the current model for growth in Greece, Papaconstantinou said that this was based chiefly on consumption fuelled by borrowing. He noted that the 2010 budget had allocated funds that boosted the income of groups with a high tendency for consumption but also allocated 10.3 billion euros for actions promoting development, noting that the funds freed from wasteful spending could be used to boost growth.

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