In a public interview yesterday, Prime Minister stressed the need for extra measures in order to cut the budget deficit from 12.7% of GDP in FY09 to below the 3% threshold by FY12.
Papandreou, among other, announced the freezing of the public sector salaries for FY10, a 10% cut on salary entitlements and the reduction of the top wages in the public sector. He also announced the increase of taxes on fuel, the dismissal of most of the tax breaks, the taxation of offshore companies and the increase of the tax on large property. Regarding dividends, PM said that they will be taxed in the personal income scale, while taxation on distributed profits that are not reinvested will increase. Regarding the pension system, Papandreou said that will rise the age of retirement. Both the pension system reform and the taxation reform bills will be announced in detail next week. Finally, Papandreou asked the unions not to strike against the measures.
