NEW YORK (CNNMoney.com) -- Facing firm demands from the European Union and financial markets to cut its deficit, Greece announced cost-cutting measures Wednesday that will save the debt-challenged country €4.8 billion, $6.53 billion, this year.
The Greek government plans to cut civil service workers' entitlements by 12%. This includes a 30% decrease in holiday bonus payments, according to The Wall Street Journal's online edition. Officials also said civil service pensions will be frozen for the year.
To increase revenue, the Greek government said it will raise the value-added tax to 21% from 19% on items including clothing and footwear. Sales tax on food and medicine will rise to 10% from 9% and the tax rate on printed products will increase to 5% from 4.5%.
The country will boost the tax on alcohol by 20% and raise the tax on tobacco to 65% from 63%. Taxes on gasoline prices will be hiked by €0.08 per liter.
Officials expect the measures will reduce Greece's budget deficit to 8.7% of the country's gross domestic product this year from a level of 12.7% last year, according to the report. The European Union had given Greece until March 16 to show it is making progress in cutting its deficit from more than four times the allowed level.
Umbrella union for civil servants ADEDY is already speaking out against the measures and has called for a 24-hour general strike on March 16, said the Journal.
In a speech to parliament Tuesday, Greek prime minister George Papandreou said the country risks bankruptcy if it neglects to find lenders to cover its €300 billion, $409 billion, in debt, the Journal said.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.99%||4.05%|
|15 yr fixed||3.13%||3.20%|
|30 yr refi||4.01%||4.08%|
|15 yr refi||3.18%||3.25%|
Today's featured rates:
Wells Fargo's board announced plans on Wednesday to strip CEO Tim Sloan and seven of his top lieutenants of their 2016 bonuses and slashed stock awards they were due to be paid. More
It's true that NATO countries are increasing their defense spending, but it has little to do with Trump. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
After seven years or so of pundits crying wolf that interest rates are about to surge and send bond prices reeling, it seems that the time for rising rates has finally arrived. More