EU and IMF Demand Greece Cut Pensions, Renew Austerity Measures

European Union creditors and the International Monetary Fund have set new demands for Greece, including decreasing pensions, increasing consumer taxes, privatizing public companies, and maintaining unpopular labor reforms.

The move comes amid ongoing negotiations about how to deal with the country's ongoing debt crisis.

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The demands indicate that international creditors are unwilling to abandon the harsh austerity measures that they had previously imposed on the Mediterranean country. which contributed to the country's massive unemployment and crippled economy.

Since austerity measures were imposed with the bailout package in 2010, Greece's unemployment rate skyrocketed to almost 30 percent, while more than half the country's youth were made jobless, and the economy went into a five year recession.

In a five-page proposal presented to Greek Prime Minister Alexis Tsipras in Brussels Wednesday, EU/IMF lenders asked Athens to scrap welfare benefits for low-income pensioners and disabled people, cut pensions by 1 percent of GDP beginning as early as July, privatize the Public Power Company and regional airports, and scrap early retirement as soon as possible.

They also demanded that Athens hike consumer taxes in order to raise some US$2 billion (1.8 billion euros). This would include increasing the value-added tax on medicines to 11 percent (currently set at 6.5 percent) and electricity to 23 percent (currently set at 13 percent).

According to Greek news website Keep Talking Greek, the boost in electricity taxes will inevitably lead to price hikes in all products.

Prime Minister Tsipras is unlikely to accept such demands, since his left-wing Syriza party was elected earlier this year after promising to roll back austerity measures in the country.

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According to media, the next meeting between Tsipras and EU/IMF creditors is scheduled for Friday, the same day that Athens is expected to pay US$335 million (300 million euros) to the IMF. A spokesperson for Syriza has indicated that it may not pay if a deal is not first reached with international creditors, reported Reuters.

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