Since the Greek Crisis, EU Member States have decided to take a common attitude towards the crisis: cut the budget deficit by cutting social expenditure. Despite their different political colours, social democrats, liberals and conservatives are applying the same measures, huge packs of structural reforms as the International Monetary Fund has demanded. Moreover, this is being implemented while the crisis has not ended, meaning that the effect of aggregate demand contraction will be even more negative for economic recovery.
Concretely,Greece will cut the 7% of its GPD this year and 4% next one, when Spain, Portugal and Irland are setting cuts of 2-3% of them GDP by 2010 and 2011 and unexpected, Germany’s government announced measures to save around €80 billions by 2014 as an example of budgetary discipline. In which budget line? In public servants wages, freezing wages and replace only a fraction of retiring workers with new hires. Moreover, pension cots will be cut in Greece, Spain and Italy. In Portugal, plans are to increase taxes, but direct taxes over consumption, which is totally regressive over house-holds income distribution.
FYEG denounces the incapacity of the Council of Europe to reach a common agreement to solve the financial problems. The heads of governments must commit to a common economic governance and give more power to Brussels to take democratic policies. Moreover, we cannot endorse any solution to this crisis without the introduction of a financial transaction tax. Last proposal has been sunk by the British veto and is unacceptable.
FYEG stands for a Social Europe, we cannot accept a reduction in wages of public servants, reduction in pensions and in public services. We also denounce the increases in indirect regressive taxes, such as VAT or consumption taxes, while high income and capital taxes remain untouched.
FYEG demands green and social expenditure to ensure peoples well-being in Europe.
Delfina Rossi

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