Debt relief included in the list of reforms to be submitted by Finance Minister Yanis Varoufakis to Greece’s international creditors on Tuesday is estimated to cost 3 bln euros. The government is seeking to have these measures approved immediately so that those hardest hit by the humanitarian crisis caused by years of austerity can be aided, however there are no clear indications as to how this aid will be funded.
Measures included in the list of reforms are part of the government’s so-called “bridge deal” until the end of June. If approved by Greece’s international creditors by the end of February, they will then be evaluated in April and May so that bargaining for future instalments concerning ol debts for Greece can begin. The success of these measures will determine whether new economic support programs will be needed over the coming years.
Government sources, state that the reforms include the following measures:
1. Measures for dealing with the humanitarian crisis that had been promised in Greece’s pre-election campaign
a) Free electricity and food coupons for at least 300,000 vulnerable households.
b) The 13th pension for low pension earners who receive less than 700 euros per month.
c) free medical treatment and pharmaceutical supplies for vulnerable groups.
d) the abolition of a special tax on heating fuel.
2) Measures for economic reforms
a) the settlement of debts owed to the tax office and insurance funds from which the government hopes to yield 2.5 bln euros (estimated at 50% this amount). It is hoped that those who owe as much as 60 bln euros would enter the program to escape being hunted by the tax service.
b) the settlement of “red loans”, with the government expected to point out the need for bank mergers.
c) an end to foreclosures and auctions of pimary residences (the Katseli Law that protects every house is still applicable)
3) structural reforms that had been announced by Prime Minister Alexis Tsipras at his pre-election speech at the Thessaloniki International Trade Fair
a) a fair tax system that would require a change to the tax index seeking as much as 50% (0r 60%) of taxes from very high incomes as well as the abolition of the single ENFIA property tax. These measures will affect the budget planned for 2016, hence are not expected to meet with the reaction of Greece’s international creditors prior to talks in June. The government hopes to yield 2.5 bln euros per year from the country’s wealthiest taxpayers.
b) the Tax office will start to pursue tax evaders immediately in an effort to chase down 1 bln euros worth of funds.
c) the government hopes to yield revenue from combatting corruption.
d) combatting smuggling (especially in fuel and tobacco) will yield 1.5-3 bln euros per year according to SYRIZA’s estimates.
e) restructuring the public sector and reducing bureaucracy would mean a huge wave of transfers and changes
f) an increase to the minimum wages and return to collective contract bargaining in the private sector
g) securing the viability of social insurance
h) structural changes to abolish market monopolies
i) no discussion of rehiring those dismissed from the Public Sector as Finance Minister Yanis Varoufakis has stated that this measure will be included in programmed recruitments within 2014. Government points to 3,500-5,500 rehirings whereas only 1,500 new recruitments would take place in 2015.
j) the government said that privatizations already agreed upon would continue out of respect to agreements and securing public interest, however it is unclear whether the airports would return to the public sector, thus offering 1.4 bln euros to the state and up to 10 bln euros over the coming years.
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