ATHENS, Greece (AP) – Greeks have woken up to a new wave of price hikes that have been demanded in return for more international bailout loans, with the highest increases targeting the main ingredients of the country’s cafe culture: Coffee and beer.
Starting Wednesday, Greece’s main sales tax rate, or value added tax, went up from 23 to 24 percent. Taxes were also raised on services used heavily by Greeks forced to cut back on leisure activities due to the financial crisis. Charges increased on internet, fixed telephone and pay TV subscriptions.
The measures were approved by parliament before Greece’s partners in the 19-country eurozone agreed to unfreeze 10.3 billion euros ($11.5 billion) in bailout funds and begin discussions on easing Athens’ debt repayments.
Greece’s left-wing government also overhauled pensions and signed up to ambitious budget targets.
Business owners have criticized the latest tax hike, saying it will hit consumption when the country is already reeling from six years of a financial crisis that has seen the economy shrink by a quarter and unemployment swell – the jobless rate is currently around 24 percent.