Thursday, June 30, 2011

millions, billions, ... (os)

Yesterday, the Greece parliament has adopted a gigantic savings plan in order to reduce further government spending and the debt accumulated so far. Well, you can think of this plan from different views, whether it is necessary or not, whether it will improve or worsen the situation (and I am sure there are different opinions) and so on. Never the less, what can be stated - at least in my opinion - is that this plan is really, really huge. Roughly 80 Billion Euro are supposed to be saved. This is 17% of the 2010 GDP of Greece!

But what is interesting to me, is the "real" value of this sum. Or in other words, what does it mean to save 17% of GDP in terms of cutbacks or tax raises? Compared to Germany this would mean a savings plan about 425 Billion Euro. At you can find a "list" of potential sources for savings. Ok, lets see how we could get 425 Billion Euro:

Cut all senior citizen payments: 80 Billions
Cut all unemployment payments: 40 Billions
Cut all kindergartens, schools, universities payments: 100 Billions
Raise "Soli" from 5.5% to 11%: 13 Billions
Raise VAT to 25%: 70 Billions

Saved till now: 303 Billions...... damn!