The EU and the IMF are to provide Greece with a €110 billion bailout. The price of this is a combination of spending cuts and tax increases equivalent to 11% of Greek GDP, on top of measures already taken this year. These measures are intended to bring about a turnaround in the Greek public debt to GDP ratio beginning in 2013 and to reduce the fiscal deficit to below 3% of GDP by 2014.
The Greek Government will also strengthen income and labour market policies; improve the management of State enterprises and improve the overall business environment. This includes measures to eliminate corruption and make procurement procedures more transparent. Greece ranks 71st in the Corruption Perception Index of Transparency International with a score of 3.8. Ireland ranks 14th with a score of 8.
The capitalisation of Greek banks is to be strengthened by the establishment of a Financial Stability Fund.
A progressive tax scale will apply to all sources of income and measures are to be taken to eliminate tax evasion and prosecute evaders.
Reductions in wages and pensions are to be structured so as to protect the most vulnerable and those living on the minimum wage. The minimum wage in Greece for an 8-hour day is €30.40; in Ireland it is €69.20.
There is also to be a significant reduction in Greek military expenditure.
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