Govt reforms submitted to partners: Read the full proposals

The government caved in with proposals very close to what the creditors demanded and the Greek people rejected during the July 5 referendum

At the strike of midnight on Thursday, the Radical Left Coalition (SYRIZA) party  submitted a plan of reforms, spending cuts and tax hikes that is close to what creditors had demanded before the referendum where 61% of voters rejected the bailout proposals on July 5.

The 13-page text, written in English, was accompanied by a letter by Prime Minister Alexis Tsipras. Noticeably absent were the signatures of Independent Greeks (ANEL) leader Panos Kammenos, Defence Minister and a junior coalition partner, and Productive Reconstruction, Environment and Energy Minister Panagiotis Lafazanis.

The proposal includes VAT changes that include moving restaurants to the 23% tax bracket instead of the 13% rate. Furthermore, VAT rates will be increased on islands, including the most popular tourist destinations. The Independent Greeks (ANEL), a junior coalition party, had opposed this reform fearing that it would decrease tourism – a lifeline for Greek growth.

Another difference with ANEL is the government’s proposal for military spnding cuts by 100 million euros in 2015 and 200 million euros in 2016.

Concessions have also been made to pensions, with the government agreeing to stop solidarity payments for poor pensioners by December 2019, earlier than planned. The retirement age will be lifted to 67 years by 2022, and 62 years for those who have worked for 40 years.

Instead of raising corporation tax to 29%, it has been raised to 28%.

Other reforms include measures to improve tax collection, fight tax evasion and privatization of state assets such as regional airports that a number of MPs had vowed to stop.

What does Greece hope get in return?

* A three-year loan worth 53.5 billion euros
* A debt write-off
* A 35-billion-euro investment package that has been promised by European Commission President Jean-Claude Juncker

CLICK HERE to read the FULL proposal in Greek followed by English