The Greek leaders, including the prime minister, Alexis Tsipras and his new finance minister, Euclid Tsakalotos had until midnight, Thursday, July 9, to submit their new proposals for reform to an agreement with their European and international creditors. Shortly after 22 pm, the Eurogroup acknowledged receipt of the new document. In this 13-page text entitled “Priority actions and commitments”, Greece is committed to adopting almost all the measures proposed by the creditors on June 26, Athens had then rejected by announcing a referendum.
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In exchange for new efforts, Athens claims a funding of 53.5 billion euros to cover its debt obligations until 2018. The government of the radical Left also wants its creditors to review the primary surplus targets for the next four years and “reprofiling” long-term debt. According to the text proposals published by the Greek government, Greece wants a solution “to set” its huge public debt, at 180% of GDP, and a “package of 35 billion euros “ devoted to growth.
The Greek Parliament will vote a vote on the proposals on Friday to allow or not the government to negotiate the reform package. The parliamentary debate will start at 13 am, French time. Greece’s reform proposals will be considered by creditors on Friday, Saturday and submitted to the Finance Ministers of the euro area, before an emergency summit of the 28 EU countries convened in Brussels Sunday.
new proposals accept a unified system of VAT rate to 23%, also including restoration, which so far was 13%. For basic products, electricity and hotels, VAT remains at 13% and 6% for medicines, books and theater tickets. The VAT hike was the bone of contention between Athens and its creditors in recent months long negotiations.
With regard to pensions, Athens offers REDUCE early departures. For this, the government relies on a system of penalties. Concerning the age of retirement, it is fixed at 67 years or 62 years with 40 years of work and will be raised gradually by 2022.
The Greek government agreed to limit the increase the corporate tax from 26 to 28% as demanded by creditors. Athens expects an increase in corporate taxes and for shipowners. The proposals also provide for the immediate raising taxes on luxury goods and advertising on TV.
Farmers should undergo these new austerity measures, including a reduction of subsidies on diesel.
The government proposes the abolition of tax benefits for the islands (the 30% reduction of VAT applied for several years), starting with the richest and tourist islands, as desired by the creditors. This removal will start in October and will be made gradually and be completed by the end of 2016, says the text.
The privatization of public enterprises will be revived. Regional airports and Piraeus and Thessaloniki ports are also concerned. Upon arrival at filling Alexis Tsipras had frozen them.
- cuts in the defense budget
Greece proposes to severely cut the budget of the Defence, with 300 million euros of cuts in two years. This is to save € 100 million in 2015 and EUR 200 million in 2016.
See the complete list of the Greek proposals (in English)
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