FACTBOX-Austerity measures in non-eurozone countries

May 27 (BestGrowthStock) – Here are some details on austerity
measures in non-eurozone countries around Europe:

CYPRUS: Cyprus must cut back on its spending to save 175
million euros ($214.9 million) in 2010 and contain its public
deficit at 6 percent, Finance Minister Charilaos Stavrakis said
on May 14.

— The EU Commission agreed that without such measures, the
deficit would have reached 7 percent. Cyprus had a budget gap of
6.1 percent in 2009 and that is expected to rise to 7.1 percent
in 2010.

CZECH REPUBLIC: Earlier this month the Czech government
decided it would have to find about 40-45 billion crowns ($2.12
billion to $2.39 billion) in tax hikes and savings to achieve
next year’s deficit target of 4.8 percent of gross domestic
product, Finance Minister Eduard Janota said.

— Parliament had approved a $4 billion savings package late
last year which aimed to cut the 2010 budget deficit to 5.3
percent of total economic output from 6.6 percent in 2009.

DENMARK: The centre-right minority government reached a deal
on May 25 with the rightist Danish People’s Party on a plan to
save about $4 billion over the next three years. The coalition
government presented its plan for budget consolidation measures
totalling 24 billion crowns ($3.95 billion) last week
[ID:nLDE64I0JF], but had to negotiate with the Danish People’s
Party for support to push the legislation through.

The deal will improve public finances by 24 billion crowns
in 2013 and by 26 billion in 2015, the finance ministry said.
HUNGARY: Hungary, once a basket case of eastern Europe due
to its repeated budget overshoots, has cut its deficit under the
scrutiny of the International Monetary Fund and targeted a 3.8
percent budget gap for 2010.

In Sept. 2009, the government approved the 2010 budget,
including further spending cuts to keep the deficit under 3.8
percent in 2010, the prime minister said. The government had to
cut costs at ministries, state railway MAV and in local
governments to be able to keep the 2010 deficit in check.

ICELAND: Iceland’s parliament approved in June 2009 a
government plan to raise taxes and slash spending to tackle a
ballooning budget deficit.

— The plan, which included tax on sweets and soft drinks, a
high-income tax, a higher capital gains tax and higher
employment insurance payments by employers, was expected to
close a 170 billion Icelandic crown budget gap over the next
four years.

— Iceland plunged into a deep recession since its top banks
failed in October 2008, forcing the country to seek billions of
dollars of aid from the IMF and European neighbours.

LATVIA: Latvia, which has implemented tough budget cuts to
qualify for loans from an international bailout, will need to
tighten its belt less than expected in 2011, Prime Minister
Valdis Dombrovskis said on May 5.

— He said Latvia’s target for 2011 to pare its budget
deficit by 2.5 percent of GDP to 6 percent would be partly met
by economic growth and larger tax revenues.

— Under a 7.5 billion euro ($10.2 billion) deal with the
IMF, the EU, Sweden and other lenders agreed in 2008, Latvia had
to cut its public sector budget deficit by 500 million lats in
both 2009 and 2010.

— The minority government, facing an election in October,
had said that a further 800-900 million lats of cuts would be
needed over 2011 and 2012.

POLAND – Poland’s plan to bring its public sector deficit
back within EU limits would require at least 60 billion zlotys
($17.88 billion) in cuts over two years and is “impossible”,
central bank policymaker Zyta Gilowska said.

— Gilowska, finance minister under the previous rightist
government, said that the deficit could not be cut back to below
the EU’s 3 percent target in either 2012 or 2013 without
strangling Poland’s economic upturn.
— Poland presented in January what analysts said was a
vague plan on how Warsaw wants to fix its public finances,
confirming the upcoming elections have put brakes on quick
reform efforts.

— But analysts still welcomed the changes in public
finances that would move up some savings, including the spending
anchor that could bring in an estimated 10 billion zlotys in

— Prime Minister Donald Tusk, when presenting his plan,
said he aimed at cutting the deficit to the EU’s 3 percent
ceiling at the end of 2012 but did not say when Warsaw could
join the euro bloc.

ROMANIA – The IMF which expects Romania’s economy to
stagnate or contract in 2010, will disburse the next tranche of
a 20-billion-euro aid deal only after the government has
implemented cost-saving measures.

— Romania’s president has said public sector wages would
have to be slashed by 25 percent from June. The IMF says the
cost cuts will probably lead to the loss of 250,000 jobs in the
state sector over a number of years.

— Romania plans to index pensions to inflation, rather than
to average wages as at present, raise the retirement age and
eliminate special pensions given to certain public job
categories. According to the government’s latest plans, pensions
would be cut by 15 percent.

UNITED KINGDOM: Finance minister George Osborne and Treasury
minister David Laws outlined plans on May 24 to cut 6.2 billion
pounds ($8.92 billion) from government spending to help reduce
the budget deficit. [ID:nLDE64N0X4]

— Included in the cuts are savings of 800 million pounds
($1.16 billion) at the Department for Business, Innovation and
Skills, a body in charge of promoting UK trade, boosting
productivity and framing business law.


FACTBOX-Austerity measures in non-eurozone countries