Wednesday, June 22, 2011

UN: Austerity plans threaten recovery

Greeks protesting austerity measures

Source: Press TV

The United Nations has warned that countries which impose tough austerity measures to avert bankruptcy threaten the global economic recovery.

“Austerity measures in response to high government debt in some advanced economies, such as Greece and Spain, are not only threatening public sector employment and social expenditure, but also making the recovery more uncertain and fragile,” the UN department of economic and social affairs said in a report.

The report further advised governments to “take into account the likely social implications of their economic policies,” AFP reported.

The UN also criticized lending conditions of financial institutions like the International Monetary Fund (IMF).

The report comes as Greek Prime Minister George Papandreou survived a crucial vote of confidence on Tuesday, enabling him to gear up for implementing tougher austerity measures in the country.

The Greek premier is seeking EUR 28 billion (USD 40.24 billion) in budget cuts and new taxes, and EUR 50 billion euros worth of privatization of public assets.

The EU and the IMF have pressured Greece to pass its austerity package by the end of June, threatening that the troubled state will not receive the next batch of bailout funds, worth EUR 12 billion euros.

The aid is the latest tranche of the EU and the IMF's EUR 110 billion aid package approved for Greece in return for tight austerity measures.

Tight austerity measures have triggered massive protests and unrest in European countries such as Greece and Spain.

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