The great "slaughter" in wages, pensions and benefits

With the new memorandum it submitted to parliament for a vote at midnight Friday, the government promises troika to slaughter jobs, wages and benefits. It commits to the economic policy that the country will take until 2015. The government is commits to achieve the primary surplus of 1% in 2012, namely 2.2 billion euros, while recognizing the risk of a deeper recession. The new memorandum states that the government will take additional measures beyond those already approved in the 2012 budget. It will take measures of 1.5% of GDP in 2012 (3.3 billion) and 5% of GDP until 2015, that is 12 billion euros.

It generally provides for the voting of a supplementary budget aiming at a primary deficit of 1% of GDP which will include all the changes below:

reduction in operating costs of the state by € 200 million
adjustment of other costs by € 280 million, electoral expenses, subsidies for remote areas, allocations for the ministry of Education (including service overseas, compensation for university staff, associate professors in secondary schools, operating costs), distributions of the ministry of Agriculture, and transfers to entities
adaptation of supplementary pensions and adoption of changes to pension funds that receive large subsidies from the budget to save € 300 million in 2012
cut of domestic investments by € 400 million compared to the 2012 budget
cut in defense spending by € 300 million compared to the 2012 budget
detection and implementation of € 325 million in cuts in additional permanent structural spending
elimination of 550 positions of deputy mayors in local government in full effect from the end of February, including the associated posts
law for determining the maximum prices of generic drugs in 40% and non-patented in 50% of patented products
reduction in profit margins for pharmacies below 15%. Reduction of wholesale from 5.3 to 5% or less. Creation of a fixed margin of € 30 for all drugs over € 200. Increase of sales for pharmacies with a turnover of over € 35.000
law on the discounts that will yield € 250 million plus expenses (after taxes), with retroactive effect from January 1, 2012 that will exceed € 240 million per month for the 2012-15 period
mandatory electronic prescription for all doctors (and pharmacies will be reimbursed only for electronic records). International protocols for 160 diseases, including the 10 most expensive
update of a negative list of drugs and pharmaceutical products. Issuing an MD that allows the addition of new brands in the positive list, if included by the two thirds of EU countries
cancellation of tax amnesty, by eliminating the suspension of prosecution and freezing of assets
mandatory exhaustion of administrative litigation before a judicial redress procedure for large tax cases
tightening of waiver rules for filing of court action

If these measures do not work, the government is committed to take more, with additional reductions in public sector wages and social and defense spending. In the case of a continuing pro-performance which will be considered permanent, tighter deficit targets will be set and a possible reduction in social security contributions.

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