Greece launches fresh round of budget cuts

Originally Posted by news.com.au

GREECE launched a fresh round of draconian austerity measures today, winning respite on the markets and setting the scene for crucial European support that analysts say could come soon.

The Socialist government increased sales, tobacco and alcohol taxes and cut public sector holiday allowances to save €4.8 billion ($7.23 billion), equal to about two per cent of gross domestic product (GDP).

Pensions in the public and private sector were also frozen.

"These decisions are necessary for the survival of the country and the economy," Prime Minister George Papandreou said.

Warning of a "race against time" to raise money for maturing debt, Mr Papandreou also turned the heat on Brussels, saying Athens was now "justly awaiting" a positive response.