Brussels reacted calmly to the results of the Greek elections that put the Radical Left Coalition (SYRIZA) party ahead of opposition. With elections out of the way, representatives of Greece’s international creditors (European Commission, European Central Bank, International Monetary Fund and European Stability Mechanism) can prepare their bags and return to the country to ensure that there is progress in 50 old and new measures that need to be applied by December. Furthermore, they will ensure that the groundwork is layed for the implementation of another hundred measures in 2016!
The fact that SYRIZA – the same party that signed the bailout deal – will be the one in power when it is implemented will ensure that the party doesn’t do one of its infamous U-turns and, as an opposition party, reject the same agreement that SYRIZA Prime Minister Alexis Tsipras had signed in August. Instead, SYRIZA will now be responsible for submitting its new budget to Greek Parliament on October 5 that will incorporate austerity measures it agreed upon.
Eurogroup Chief Jeroen Dijsselbloem welcomed the election results on Twitter. He wrote:
“Ready to work closely with the Greek authorities and to continue accompanying #Greece in its ambitious reform efforts #eurogroup congratulates Alexis Tsipras, looking forward to swift formation of new government with strong mandate to continue reform process #Greece,”
Further pension cuts now seem certain, and will apply retroactively from July 1, 2015. What’s more, pensions are to be butchered further until 2012, regardless as to whether there are changes to taxes applied in 2016 and 2017.
New taxation changes from October foresee:
* The extraordinary solidarity contribution will be permanently incorporated to income tax.
* Abolition of tax benefits that protect income tax.
* Changes to assets testing for property, cars, yachts, private school fees etc.
* Increases to taxation for farmers from 13% to 20% for 2016 and 26% in 2017.
* Increases to taxation from rent from from 11% to 15% and for accruals at 12,000 euros from 33% to 35%.