Syriza government enforces new budget cuts in Greece
11 January 2019
The budget passed by Greece’s Syriza (Coalition of the Radical Left) government for 2019 continues to enforce austerity on behalf of the nation’s creditors among the global financial institutions and European Union (EU).
Passed by parliament in December, it was the first budget since Greece formally exited the eight-year loans for austerity programme in August. Since then Greece has been allowed for the first time since 2010 to raise funds in the financial markets. In his speech to parliament, Greek prime minister and leader of the pseudo-left Syriza, Alexis Tsipras, declared: “Today we are voting the first ‘post-bailout’ budget. A budget of fiscal expansion after eight years austerity. The first budget which is our own.”
None of this is true.
Greece has exited the austerity programme in name only. Its budget is still subject to approval by the EU Commission, which it gave one month before the vote in parliament. Moreover, under the terms of the programme the Greek government is required to run primary surpluses of 3.5 percent of GDP until 2022 and then 2.5 percent of GDP until 2060. Failure to meet these targets can mean that the EU can demand that the Greek government impose additional austerity measures.
The burden of maintaining these primary surpluses is borne by the Greek working class with household incomes having been reduced by nearly 30 percent since 2010. Taxation measures imposed by successive governments, with a ballooning especially of indirect taxation, disproportionately hits the poorest in society. Indirect taxation in Greece made up a massive 39 percent of all tax revenues in 2017—the largest such proportion in the EU and compared to 26 percent in…