VAT upped to 24% plus Internet levy, but still insufficient

The closer a deal approaches, the more new measures are revealed

The Greek government seems ready to offer more concessions and ‘shift’ its red lines in talks with the Quartet, in order to reach a deal as soon as possible. Even though the Greek side showed its willingness to close a deal by accepting to raise the VAT from 23% to 24%, it is becoming apparent the an agreement is unlikely any time soon. Following protracted talks, which lasted for 17 hours and ended in the early hours of Thursday, little progress was made regarding the key areas of dispute between the two sides. Greek Finance Minister Euclid Tsakalotos will make a last ditch effort Thursday morning at 10 to convince the Quartet and extract a deal before the institutions’ representatives leave for Friday’s Eurogroup meeting in Amsterdam. Greece’s lenders disagree with the government’s proposals on the new taxation system, the social security reforms and mainly the ‘red loans’ scheme, which make up most of the 5.4bln Euros for the primary surplus to be achieved, arguing they will not yield the desired funds. The creditors are pushing for a lower free tax threshold level for pensioners and employees, proposing an immediate reduction to 8,182, compared to Tsakalotos’s 9,090 from the current 9,545 Euros.