Greece Presents Austerity Budget for 2011

Today Greece presented the draft for the 2011 austerity budget and promised to increase tax revenues while ending cuts to the public sector. The state hopes to earn $6.8 billion from these new tax measures and are aiming to cut the deficit from 13.6% of GDP last year to 7.8% this year. The plan includes "a one time tax on companies and an increase in the midrange value-added tax" as well as a tax amnesty plan to encourage citizens to settle unaudited tax filings. These measures are on top of the many tax increases implemented in the past months. One economist argues that the new administration working with the IMF makes a big difference and that Greece should be lauded for the achievements it has already made, such as cutting the budget deficit in half in a single year. However, another economist warns that "Greece is still a long way from demonstrating that it can put the public finances on a stable footing without resurrecting its debts. We continue to think that some kind of default is eventually very likely".