Greece and its international lenders (EC, ECB, IMF and ESM) reached the 85-bln-euro bailout agreement to cover the next three years after 23 hours of talks that ran through the night on Tuesday. The deal struck up “in principle” includes terms that need to be voted in advance before the currency bloc’s finance ministers can give their approval at Friday’s Eurogroup so that Greece can make its 3.2-bln-euro debt repayment to the European Central Bank (ECB) on August 20.
The new Memorandum of Understaning – Greece’s third bailout – was submitted to Greek Parliament at midnight on Tuesday, titled “Ratification of the draft contract for funding by the European Stability Mechanism and regulations for the implementation of the funding agreement”. It includes a list of painful changes that need to be legislated before Greece gets a cent. After two hours it was posted on Greek Parliament’s web site as it needed the approval of Parliamentary Speaker Zoe Konstantopoulou.
CLICK HERE for the first part of the draft legislation (in Greek).
CLICK HERE for the second part of the draft legislation (in Greek).
CLICK HERE for the third part of the draft legislation (in Greek).
CLICK HERE for the fourth part of the draft legislation (in Greek).
CLICK HERE for the report of the General Accounts Office.
CLICK HERE for the special report on consequences.
38 “hot” terms for the deal to be agreed upon:
1. Changes to the Bankruptcy Code.
2. Changes to the revenue code and rules for public debt writeoffs.
3. Restrictions to the limits concerning seizures.
4. Changes to rules for debts to the public sector.
5. Changes to debt repayments in 100 installments.
6. Changes to annual credit reviews of businesses.
7. Tax downpayment increases to businesses.
8. Abolition of the 26% Tax contribution for imports to avoid transactions via Cyprus, Bulgaria, etc.
9. Limits to tax exemptions for shipping.
10. Abolition to tax exemptions for betting agencies of the Greek Organisation of Football Prognostics S.A.(OPAP).
11. Restrictions to tax exemptions in agriculture.
12. An end to tax reduction for farm diesel fuel.
13. VAT reduction from 23% to 13% for beef.
14. VAT increase from 0% to 23% for private educational institutions.
15. Electronic system to combat tax evasion and smuggling.
16. The Tax Fraud Squad (SDOE) to be merged with the partly independent General Secretariat of Public Revenue of the Finance Ministry.
17. Increased freedom for tax fraud investigators.
18. Restriction to compensation for the public sector.
19. Partly automatic cutbacks of state funds from the fiscal council if the budget does not meet targets.
20. Immediate application of all the terms voted in June for the bridging loan.
21. Abolition of taxes for third parties.
22. Changes to social security funds debt.
23. Changes to the lower pensions.
24. Merging of auxiliary funds.
25. Increasing the retirement age.
26. Reduction to prices of medicines.
27. A ceiling on spending for supplies at state universities and applying an automatic mechanism for returns from health funds back to the public sector (claw back).
28. Changes to the administration of state universities.
29. Changes to the way in which shopping sales/discounts are conducted.
30. Measures to liberate the energy market.
31. Separation of the Hellenic Gas Transmission System Operator (DESFA)
32. Liberation of the market for transport trucks.
33. Measures for the liberation of the milk/dairy product market.
34. Measures for the liberation of the bread/bakery product market.
35. Measures for the liberation of the tourist coach market.
36. Measures for the opening of tourist professions.
37. Measures for the opening of the judicial profession.
38. Measures for the opening of the notaries/solicitors profession.
