Greece introduces tax rises as crisis talks continue

Greece imposed a wave of new tax rises today despite recession and high unemployment, as EU finance ministers met to discuss the country’s debt crisis.

The government increased VAT from 19% to 21%, as part of the austerity package intended to cut the budget deficit by almost a third this year.

It raised the cost of fuel and most consumer goods and services, although many retailers have said they will try to minimise the effect on shop prices.

Greece will present the first results of its austerity measures at the EU ministerial meetings today and tomorrow, and says it is looking for political rather than financial backing to pull through a crisis that has hammered the euro and alarmed global markets.

Both Athens and Berlin have dismissed reports that the finance ministers would decide to extend financial aid to Greece. As Europe’s largest economy, Germany would be deeply involved in any bailout, and has strongly resisted the idea.

EU officials said at the weekend they had developed a set of options to help Greece, but Athens would have to arrange for possible loan guarantees with each individual government.

Greece’s finance ministry says the austerity program, which also involves civil service wage cuts and freezes on hirings and pensions, “appears sufficient” to meet budget saving targets.

The cutbacks have angered unions, which responded with strikes and demonstrations that were marred by extensive riots.

Opinion polls show the public is increasingly unwilling to accept the measures.

While one in two Greeks agreed that the austerity package was “generally in the right direction” to help government finances, 42% disagreed, according to a survey published in the Ethnos newspaper. Nearly 66% said the cutbacks were unfair.

A poll in the Sunday Eleftherotypia newspaper found that 51% of respondents were prepared to take action against retirement age increases and cuts in wages and pensions.

State power corporation workers will be on strike tomorrow and Wednesday, while petrol station owners, state hospital nurses and teachers are also planning walkouts this week.