A VAT increase in hotels from 6.5% to 13%, the freezing of pensions in 2016-2017 and the use of lotteries to provide incentives for higher VAT revenues via receipts are some of the compromise measures that are included in the 43-page letter sent my Mr. Hardouvelis to the Troika of Greece’s lenders over the weekend, according to an article published by Kathimerini newspaper.

The Finance Minister’s letter states that the proposed measures that are listed can fill the budget cap that keeps the Troika for returning to Greece for the final assessment, by generating 980 million Euros. The Greek side also mentions that if their forecasts are not met by July 1, 2015 the Government will consider further measures, such as raising cigarette taxes.

More specifically, the immediate measures proposed by Greece include:

1. VAT: By increasing the VAT rate on hotel prices from 6.5% to 13%, the government estimates that it will yield 350 million Euros.

2. Social security: Freezing pensions at the level of 2015 for the next two years will yield approximately 190 million Euros, the Government says.

3. Increasing VAT revenues via lottery and other administrative measures. The implementation of “@apodeixi” program is expected to yield at least 500 million Euros.

The additional measures to be implemented if the forecasts are not met by July 1, 2015 include:

-Revoking the 30% decrease of solidarity contribution for 2015 and 2016

-The implementation of Luxury tax

-Increasing taxes on tobacco and alcohol