Measures proposed by Finance Minister Yannis Stournaras to slash €11.6 billion from spending and raise a further €2 billion in taxes were agreed upon in a meeting between Prime Minister Antonis Samaras, PASOK leader Evangelos Venizelos, and Fotis Kouvelis, leader of the Democratic Left. Venizelos and Kouvelis reportedly
had some reservations regarding the measures, but agreed to support the package.
Cuts to wages, pensions and benefits account for €6.5 billion; other savings will come from structural reforms. From 2013 the retirement age will increase from 65 to 67.
Changes to the tax system will see the abolition of the €5,000 tax free allowance for freeholders who will be taxed at a flat rate of 35 percent on all of their income. According to the Athens News
the current top rate of tax, 45 percent, will be cut to 35 percent for pensions and salaries, while the tax free allowance remains at €5,000.
noted that "it appears as if the brunt will fall on the most vulnerable again while tax evaders will largely continue to escape although they owe the country more than $70 billion."
The party leaders have managed to protect public sector workers from layoffs, an issue the Troika has continually stressed must be addressed. There are still no government figures as to how many people are employed in the public sector.