FinMin pledges more cuts in public spending

Greek Finance Minister George Papaconstantinou on Tuesday said the government would seek further cuts in public spending but reiterated the government’s commitment that there would be no new cuts in salaries and pensions in the public sector.

In an interview with CNN, the minister pledged that no new taxes would be imposed, except from an increase in VAT rates as envisaged in a memorandum signed with the EU/ECB/IMF.

“We believe it is impossible to continue cutting salaries and pensions, or raising taxes, as the economy is an a condition where any new rise in taxes would have the opposite results,” he noted, adding that there was room for further cutting public spending and that final decisions would be taken after consultations with the troika.

Papaconstantinou stressed that the 2011 budget would not have any other taxes other than the ones included in the memorandum, such as a small rise in VAT.