EU tells Greece to take strict measures
The European Commission will tell Greece on Wednesday to consider additional measures to cut public spending in case its stability and growth plan should fail, reports in Kathimerini and the Financial Times reveal. The measures include slashing public sector pay and raising taxes on non-essential goods.
Kathimerini (in Greek): http://news.kathimerini.gr/4dcgi/_w_articles_politics_2_31/01/2010_389076
Greece suffers from 'credibility deficit'
The Financial Times' Gillian Tett describes the Greek prime minister's credibility deficit in international fora on the occasion of his speech to the World Economic Forum.
British Chancellor of the Exchequer Alistair Darling says Britain would not assist the eurozone in a possible bailout of Greece.
The FT's Daniel Gros comments: "When taking over a company in distress, one does not consider only the views of management. Similarly, a bail-out of a country makes sense only if all stakeholders contribute. Saving a country that is consuming too much makes sense only if the entire body politic accepts that more than a fiscal adjustment is required. Deep cuts in private sector wages and consumption are needed before any outsider should even consider stepping forward."
Economic changes to be rushed
Eleftherotypia reports that Prime Minister Yiorgos Papandreou, upon his return from the World Economic Forum in Davos, last night gave four main priorities to his cabinet:
a) Rushing the National Statistical Service to independence (a bill is under preparation).
b) Rushing the new tax code to parliament, which abolishes special tax brackets and puts all professions on a sliding scale.
c) Cutting public sector benefits.
d) Reforming social security.