Euro rises amid new austerity measures in Greece

| March 3, 2010
Euro rises amid new austerity measures in Greece

The Greek Government has today unveiled a new series of measures aimed at tackling the country’s debt problems, which has resulted in the euro recovering 0.3% to $1.3637.

Growing fears over the debt crisis in Greece have weakened the value of the euro in recent weeks as Greece takes action to reduce its public deficit from 12% to 8% of GDP this year.

The country currently has the highest debt of the 16-member euro zone – at €300 billion (£259 billion).

Today’s austerity measures include increasing the rate of VAT by two percentage points to 21%, as well as trimming civil servant bonus payments during holidays by 30%.

A Government official said today: “The measures are expected to yield the state more than €4 billion this year.”

However, previous austerity measures, which included a public sector pay freeze and a hike in taxes, angered Greek trade unions and resulted in two million workers staging a nationwide strike last week.

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