Greece has unveiled its new "austerity plan" in an effort to prevent financial calamity. From the Fiscal Times:
The measures contain euro2.4 billion ($3.3 billion) in new revenues such as taxes and another euro2.4 billion in spending cut. They include cuts in civil servants' salaries, pension freezes, increasing sales tax, or VAT, from 19 percent to 21 percent and hiking taxes on alcohol, cigarettes, luxury cars, yachts, precious stones and leather goods among others.
Cutting civil servants' salaries and pension freezes is a step in the right direction. (Also brave: Taxing alcohol and smokes in Greece. That'll cause a riot.)
It's such news that UniCredit analyst Tullia Bucco offered in a Wednesday research note that:
... [R]educing the compensation of Greek government employees represents an important area of potential savings, as could a reform of the country's pension scheme.
UniCredit said Greek pension expenditures currently absorb nearly half of the resources devoted to social payments, while the effects of population aging will become critical by the end of the decade. [emphasis mine]
Well, I guess they have their work cut out for them.