The government is under asphyxiating pressure to submit a new draft bill to Greek Parliament on Thursday if it hopes to receive the 2-billion-euro tranche benchmarked for Greece. Non-performing (so-called  “red”) loans and VAT hikes in private education are the two thorny issues that are currently on the table. The European Commission has already clarified that VAT rates for private education should either be zero or 23%.

The Radical Left Coalition (SYRIZA) government is concerned about the political costs involved in imposing such high taxation and is on a frantic scramble to find other equivalent measures. Furthermore, there are reservations as to the effectiveness of a VAT hike that could result in an exodus of students from private schools thus causing further pressure to the already heavily burdened state education system. Another concern is the fact that a hike in VAT rates won’t just hit high incomes but also burden low and middle wage earners that have decided to place their children in private schools. The measures is opposed from conservatives as well as leftist groups in Greek Parliament.

If the planned VAT hikes to private education are scrapped, the government would need to scrape 300 mln euros from elsewhere. Other considerations concern an increase to excise duties for luxury and large cars, as well as duties for hybrid cars and those with anti-pollution equipment that are currently exempt from such taxes. Critics of such a measure state that it would lead to a new wave of returns to vehicle plates and also result in negative consequences to the already hard-hit automobile industry.

The Euroworking Group is meeting on Thursday night to discuss whether or not it will approve the disbursement of the 2-billion-euro tranche for Greece. Without it, the recapitalization of Greek banks will be further delayed, endangering deposits.