Here’s what creditors’ conditions are, as listed in a framework text handed to the Greek government.
— An extra 1.8 billion euros in revenue for VAT hikes, with the rate at 11 percent for foodstuffs, medicines and hotels, but with the abolition of the lower for certain islands.
— Gradual abolition of cost-of-living bonus to low-income pensioners
— Merger of several pension funds
— Unified pay scale in the public sector
The plan was presented by EU Commissioner Jean-Claude Juncker to PM Alexis Tsipras late on Thursday in Brussels, as the conditions were essentially fleshed out earlier by the troika’s (Institutions) representatives.
According to the newspaper “Vima”, the proposal is comprised of two separate texts, the first entitled “GREECE – POLICY COMMITMENTS” and is five pages; the second is called “Prior Actions” and extends to seven pages.
Other measures include provisions for an extra three billion in revenues for 2015, in order to reach a goal of a 1-percent primary budget surplus for the year.
In terms of pension reform, creditors want a full implementation of laws passed in 2010 and 2012, aiming at savings of 1.8 billion euros.
Moreover, much stricter conditions for allocating early pensions is demanded.
Additionally, creditors want a continued effort to liberalize the job market and services sector, eyeing the complete implementation of the OECD’s “tool kit”.
On its part, the Tsipras government’s proposal calls for the … doubling of an “extraordinary tax” on incomes above 30,000 euros.
Obviously, for the radical leftist government that figure is considered the “wealthy threshold” for a family where both spouses work, i.e. 1,300 euros each per month before taxes…
Nevertheless, the government did not publicize its text in Greek.
It was Tagesspiegel that first published the 47-page Greek proposal, which was dated June 3 — in English.
Athens proposed three VAT rates: 6, 11 and 23 percent, with the lowest only for pharmaceuticals, the theater (?) and books.
The 11-percent mark was reserved for periodicals, “basic and perishable foods”, energy, water supply and tourism-related services.
