BRUSSELS/ATHENS, June 23 (Reuters) – Greece presented new reform proposals on Monday which its euro zone partners cautiously welcomed as a possible basis for an agreement to unlock bailout funds needed to avert a possible debt default. (Full Story)
Here is a summary of the proposal as spelled out by Greek government officials.
PENSIONS
Early retirement to be curbed gradually from 2016 to 2025, but exemptions for some specific categories to be maintained, including for arduous professions and mothers with disabilities.
A special benefit for some low-income pensioners, amounting to between 57 to 230 euros ($64.66 to $260.89) a month to remain but to be replaced from 2020 by new protection framework for low pensions. This is a key point of friction between Greece and its lenders, who wanted it scrapped.(Full Story)
VAT
Greece to keep three value added tax rates of 23 percent, 13 percent and 6 percent. Electricity and restaurants to be taxed at 13 percent instead of being raised to 23 percent, as lenders had demanded, while medicines to be cut to 6 percent rather than raised to 11 percent as sought by lenders. Officials said lenders were asking for two rates of 11 percent and 23 percent.
TAX HIKE FOR HIGH EARNERS
Solidarity tax for higher income earners (revenues above 50, 000 euros ($56, 710) to be increased, while lowering the tax for revenues below 30, 000 euros. It introduces a solidarity tax of 8 percent on revenues above 500, 000 euros.
CORPORATE, LUXURY TAX HIKES
Tax plans to include: a) a special levy of 12 percent on businesses that post a profit of over 500, 000 euros; b) Increases in luxury tax on pools, planes, big cars and private boats over 10 meters (33 feet); c) a tax on gambling slot machines (VLTs).
PRIVATISATIONS
Privatisations to impose a minimum amount of investment, a commitment by investors to promote the local economy and a participation of public equity.
The transfer of Greece’s state equity in Greek telecoms operator OTEr.AT to the country’s privatisation agency will not be part of the lenders’ prior actions.
Greece will not privatise its power grid operator (ADMIE) nor its dominant power utility PPC DEHr.AT, as requested by creditors.
PUBLIC SECTOR WAGES
No cuts to public sector wages from levels at end-2014.
SPENDING CUTS
Cut defence spending by 200 million euros.
PRIMARY BUDGET SURPLUS
Primary budget surplus of 1 percent in 2015 and 2 percent in 2016, compared with 3 percent and 4.5 percent agreed to by previous Greek governments.
BONDS
Greece repeated demand for euro zone to lend it money to buy back 27 billion euros of its bonds from European Central Bank – effectively rolling-over the debt on more favourable terms.
INVESTMENT
Greece wants deal to include financing of infrastructure and new technologies through an investment package from the European Commission and the European Investment Bank.
NUMERICAL TARGETS
Greece plans fiscal measures worth 7.9 billion euros over 2015 and 2016. According to a planning document published by Greek daily Kathimerini, the measures break down as follows. Figures in millions of euros, except where indicated:
2015 2016
VAT REFORMS 680 1.360
PENSIONS
Early retirement accruals 60 300
Increase main contributions by 3.9 pct 350 800
Increase pensioner health contributions
(Standard) from 4 pct to 5 pct 135 270
Increase pensioner health contributions
(Supplementary) from 0 – 5 pct 0 240
Increase contribution for supplementary funds
From 3 pct to 3.5 pct 120 250
CORPORATE, INCOME TAX
Special 12 pct levy on companies with profits above 500, 000 euros 945 405
Raise top-rate corporate
tax from 26 pct to 29 pct 0 410
Increase solidarity levy 220 250
OTHER MEASURES
Defence spending 0 200
TV advertising tax 100 100
Luxury goods tax 47 47
Electronic gambling tax 35 225
4G, 5G phone licences 0 350
TOTAL (in billions) 2.692 5.207
(Pct GDP) 1.51 2.87
($1 = 0.8817 euros)
(Reporting by Renee Maltezou and Angeliki Koutantou; Writing by Ingrid Melander; Editing by Lisa Shumaker) ((ingrid.melander@
