Financial News: Gov’t eyes drastic spending cuts in 2012 budget

The finance ministry ordered government ministries to drastically cut back on overtime pay, subsidies and operating spending, ahead of drafting a state budget for 2012 and based on targets envisaged in a Medium-term Fiscal Strategy programme for the Greek economy.
The government expects to focus on reducing the fiscal deficit by cutting spending, since any new tax measures could further deepen an already punishing recession in the country.
In a circular sent to government ministries, Filippos Sahinidis, the alternate finance minister, asked ministries to strictly adhere to targets envisaged in the programme and called on ministers to draft budgets based on reducing overtime pay and subsidies, better exploiting assets and cutting operating spending by 20 pct.
The circular also asks ministries to strictly adhere to payroll commitments, which include amongst others, cutting performance bonuses by 50 pct, suspending payroll maturity bonuses and implementing the 1:10 retirement / hiring ratio this year and 1:5 next year.