The Greek government said that it would ask parliament within a few days to approve a fresh package of austerity measures aimed at reducing the debt-laden country's bloated budget deficit.
The envisioned actions seek to convince the country's international creditors that Athens is doing its best to meet the strict fiscal targets under its 110 billion-euro bailout agreement with the EU and IMF in May 2010.
The government's most important goal however is to secure the quick disbursement of a new 8 billion-euro tranche from the rescue package to prevent Greece from defaulting on its huge debts. Officials have been warning in recent weeks that the country will run out of money by the middle of October.
In addition to a series of painful steps approved since last year's bailout, Greeks are now set to face further pension and wage cuts, as well as new tax increases, if lawmakers endorse the new measures. Thousands of workers are likely to lose their jobs, as scores of state-owned enterprises would be closed down by the end of this year.
Unveiling the plan after a seven-hour cabinet meeting Wednesday, government spokesman Elias Mossialos said the number of civil servants to be placed in a special labour reserve within the next three months was increased by 50% to 30,000 people. They would be put on partial pay until the government decides whether to kick them out or re-employ them. The measure would affect 3% of the more than 750,000 Greeks currently working in the public sector, according to Mossialos.
The cabinet also decided to further lower the 8,000-euro threshold on tax-free income introduced earlier this year. As of 2012, all earnings above 5,000 euros will be taxed, the spokesman said.
The new austerity measures will affect many Greek retirees as well. Those whose monthly state pensions exceed 1,200 euros would see the amount above that threshold cut by 20%. Pensioners under 55 collecting more than 1,000 euros a month would have any sums above that limit reduced by 40%.
On Wednesday, the government also decided that the new property tax announced earlier this month, which was supposed to be in force for two years only, would be extended until at least 2014.
Other measures it announced without offering any details included the introduction of a unified pay structure for the Greek public sector, several structural reforms and privatisations, Athens-based daily Kathimerini reported.
The new measures were announced a day after the end of two-rounds of conference calls between Greek Finance Minister Evangelos Venizelos and senior representatives of the so-called troika -- the European Commission, the European Central Bank and the IMF.
"These choices send the message to our partners and the markets that Greece wants and is able to fulfill its obligations, always remaining in the central core of the euro and the EU," a statement issued after the cabinet's meeting on Wednesday said.
The troika will send a new mission of inspectors to Greece to review its compliance with the terms of the bailout before deciding whether to approve the disbursement of the next aid tranche.
Addressing parliament ahead of Wednesday's cabinet meeting, Venizelos explained the need for further tough measures.
"If we did not have the supervision of the troika ... we would have again unfortunately slipped off course," the minister said. "It's not a question of intent. It's a matter of mentality, lack of ability, management structure, methods, habits and inertia."
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