Living in Crete | Will Greece's 2010 Austerity Budget Work?

Greece's 2010 Austerity Budget | Will It Affect Expat Residents?

Expat Living in Crete continues to be exposed to market and economic gyrations. At least on December 24, a clearer direction was announced when the Greek Parliament after a marathon 5 day debate approved Greece's 2010 budget. Austerity is the key word. A two pronged attack will boost tax revenue while cutting spending, salary freezes and a hiring freeze in public sector jobs.

Recently elected to power, socialist Prime Minister George Papandreou blamed the awful state of Greece's finances on corruption, tax evasion and government waste. For once he did not name members of the outgoing government in November of being the sole culprits.

Kickbacks are endemic and are part and parcel of life in Greece for Greeks. For the most part rarely are foreigners directly implicated by corruption at the day-to-day level of government. Several years back I did hear of how a case of whiskey had to found to get a five year residency permit for a Scot. "Your a Scot, You know how good is whiskey". But I suspect with greater transparency in governance those days are passed with the tightening up of government procedures and computerization.

What is in store then for life in Greece in 2010? Greece has had to tell the European Central Bank (which is in charge of the euro) that the country is to cut the budget deficit from 12.7% of gross domestic product in 2009 to below 9.4% next year, aiming to improve even this figure to 8.7% with further schemes.

Greece's national debt in 2010 is expected to reach 325 billion euros against generating income of just 244.2 billion euros in a contracting economy.

There are not many ways that foreign expat residents in Greece or with property in the country are going to feel the pinch further than that experienced in recent months except if they are receiving any Greek social security payments. Selective cuts will be up to 10 per cent. But keep an eye out for any "new" or increased taxes related to your property. Apart from local gossip your first stop should be your accountant to see if there are any changes that affect you. Sometimes local tax offices find an reason to levy taxes which they may have selectively overlooked in the past. Just a thought.

Greece's jobless figures are currently at a high of 9.3 per cent, a four year record. That is behind Spain and Ireland isn't it?

Opponents of the government's latest plan now being carried out, worry that all the cuts in expenditure will create another lost generation of the "euro 700's" - low income workers squeezed at the bottom end of the economic ladder in take home monthly pay. Opponents want real job creation as a key solution. That is a sound objective in my opinion.

So the best advice for expats in Crete and around Greece is that nothing changes very fast and any fresh impact of recession will become slowly evident. Mind you I was amazed at how fast the new government imposed the increased annual car tax to be paid by December 31 when the notification in the mail to pay did not arrive until well into December.

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