Fourth austerity package (Greece)

Fourth austerity package - 'The Medium-term Programme'
Hellenic Republic
Medium-term fiscal strategy 2012-15 (Law 3895/2011)
Territorial extent	Greece
Enacted by	Hellenic Parliament
Date passed	29 June 2011 (For: 155; Against: 138; 5 Abstentions)
Introduced by	Government of Greece
Status: In force

The Fourth austerity package, commonly called 'The Medium-term Programme' or 'The June 2011 measures', is part of the countermeasures of the Greek government to counter the Greek government-debt crisis. It was approved by the Hellenic Parliament in June 2011.

Further austerity was introduced in 2011. In the midst of public discontent, massive protests and a 24-hour-strike throughout Greece,^[1][2] the parliament debated on whether or not to pass a new austerity bill, known in Greece as the "mesoprothesmo" (the mid-term [plan]).^[3][4] The government's intent to pass further austerity measures was met with discontent from within the government and parliament as well,^[4] but was eventually passed with 155 votes in favour^[3][4] (a marginal 5-seat majority). Horst Reichenbach headed up the task force overseeing Greek implementation of austerity and structural adjustment.^[5]

Specific measures

The new measures included:^[6][7]

• Raising €50 billion from privatisations and sales of government property.
• Tax Reform
  • Increasing taxes for those with a yearly income of over €8,000.
  • An extra tax for those with a yearly income of over €12,000.
  • Increasing VAT in the housing industry.
  • An extra tax of 2% for combating unemployment.
• Pension Reform
  • Lower pension payments ranging from 6% to 14% from the previous 4% to 10%.
• Creation of a special agency responsible with exploiting government property, and others.

On 11 August 2011 the government introduced more taxes, this time targeted at people owning immovable property.^[8] The new tax, which was paid through the owner's electricity bill,^[8] affected 7.5 million Public Power Corporation accounts^[8] and ranged from 3 to 20 euro per square meter.^[9] The tax applied for 2011–2012 and was expected to raise €4 billion in revenue.^[8]

On 19 August 2011 the Greek Minister of Finance, Evangelos Venizelos, said that new austerity measures "should not be necessary".^[10] On 20 August 2011 it was revealed that the government's economic measures were still out of track;^[11] government revenue went down by €1.9 billion while spending went up by €2.7 billion.^[11]

On a meeting with representatives of the country's economic sectors on 30 August 2011, the Prime Minister and the Minister of Finance acknowledged that some of the austerity measures were irrational,^[12] such as the high VAT, and that they were forced to take them with a gun to the head.^[12]

See also

• First austerity package (Greece)
• Second austerity package (Greece)
• Third austerity package (Greece)
• Fifth austerity package (Greece)
• Sixth austerity package (Greece)
• Seventh austerity package (Greece)
• Eighth austerity package (Greece)
• Ninth austerity package (Greece)
• Tenth austerity package (Greece)
• Eleventh austerity package (Greece)
• Twelfth austerity package (Greece)
• Thirteenth austerity package (Greece)

References