GREECE was preparing to restart its struggling economy yesterday, with a revamped government, a bank reboot and a new round of tax rises agreed after months of fraught confrontation with creditors.
Banks are set to reopen today after a three-week shutdown estimated to have cost the economy some 3 billion euros (US$3.3 billion) in market shortages and export disruption.
Crisis-hit Greeks will also have to endure widespread price rises for a broad batch of goods and services, from sugar and cocoa to condoms, taxis and funerals, now taxed at 23 percent, up from 13 percent.
To sweeten the pill, the tax on medicines, books and newspapers falls from 6.5 percent to 6 percent.
With Greeks now able to withdraw up to 420 euros per week in a single transaction, people will be spared the ordeal of queuing daily at ATMs in the summer heat, which thousands did for three weeks for an allowance of 60 euros a day.
But capital controls remain largely in place, including a block on money transfers to foreign banks and a ban on the opening of new accounts.
Greece last week had to agree to a tough fiscal package to earn a three-year bailout from its international creditors and avoid crashing out of the eurozone.
For the first time in months, technical teams representing the creditors — the European Union, the European Central Bank and the International Monetary Fund — are expected in Athens next week to assess the state of the economy.
The austerity package caused a mutiny among lawmakers from the ruling Syriza party, forcing Prime Minister Alexis Tsipras to carry out a limited reshuffle last Friday.
Even so, most analysts and even government officials say early elections are now inevitable, possibly in September.
Tsipras — who barely has time to eat or sleep, according to his mother — faces a fresh challenge in parliament on Wednesday to approve a second wave of reforms tied to its economic rescue.
Tsipras’ coalition holds 162 seats in parliament, but in last Wednesday’s vote, only 123 government MPs backed the bailout — just over the minimum 120 required to sustain a minority government.
Nearly a quarter of Syriza’s lawmakers — 39 out of 149 — failed to support the reforms bill, which passed thanks to solid support from opposition parties.
The government has agreed to raise taxes, overhaul its ailing pension system and commit to privatizations it had previously opposed, in exchange for a bailout of up to 86 billion euros over the next three years.
The draconian agreement — accepted by a party that came to power in January promising to end austerity — came after over 61 percent of Greeks on July 5 rejected further cuts in a referendum called by Tsipras.
His critics accuse him of kowtowing to blackmail by creditors, who threatened to expel Greece from the eurozone.