Greeks pass critical budget cuts despite protests
Greek politicians have approved an unpopular package of austerity measures designed to rein in debt levels that threaten to destabilize the economy. So what is behind the crisis and why does it matter outside the country?
http://edition.cnn.com/2011/WORLD/europe/0...
http://edition.cnn.com/2011/WORLD/europe/0...
(CNN) -- Greek politicians have voted to bring in an unpopular package of austerity measures designed to rein in debt levels that threaten to destabilize the country's economy.
What are they voting for?
A harsh program of cuts proposed by Socialist Prime Minister George Papandreou's government to meet requirements demanded in exchange for international rescue loans.
The aim is to cut $20 billion in public spending while raising a further $20 billion through taxes and privatization. This means increased VAT, higher levies on householders and companies and sharp hikes in fuel, alcohol and tobacco prices.
Spending cuts will see heavy public sector job losses, school closures and restrictions on welfare benefits. There will also be sell offs of state assets and ventures including the postal service and key ports.
Why is it needed?
Without the measures Greece's debt would continue to climb and there is a strong chance it will default on repayments.