Monday was a big day for Greece, which saw its banks open after almost three weeks of being closed and received a fresh loan from the European Union.
However, of the US$ 7.8 billion (7.2 billion Euro) emergency bridging loan, almost all of it went to the International Monetary Fund and the European Central Bank to repay debts – not to the Greek people who are still suffering from the previous austerity measures and resulting economic downfall.
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In the mean time, fresh austerity measures also came into effect in Greece Monday. This includes a 10 percent VAT tax hike, from 13 to 23 percent, on most consumer goods. This will take an immediate toll on the Greek people.
Here are five ways the VAT tax hike will affect Greek citizens as of Monday July 20:
1. The 10 percent tax hike will be applied to more than 40,000 food items in the country, including: beef, coffee, tea, cocoa, spices, sugar, oils etc, including other daily items such as condoms and tampons.
2. This is expected to raise the household spending by at least US$ 60 (55 Euros) per month. Average greek salaries in 2014 were around US$1000
3. The same increase will also be applied to transportation tickets, taxis and some education such as foreign language schools
4. The 10 percent rise in VAT taxes will be applied to restaurants immediately, while hotel accomodation will rise from 6.5 percent to 13 percent as of October – what is expected to hurt Greece's competitiveness in tourism, a major source of its economy.
5. The total extra burden for households is expected to be US$ 705 million (650 million euro), according to reports by Keep Talking Greece.
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