ATHENS With a shy reopening of banks and the impact of a tax increase, Greece is preparing for the start of an uncertain economic recovery marked by a new era of austerity.
The government just remodel the prime minister, Alexis Tsipras, and opposites to new austerity measures were excluded ministers, declared today the reopening of banks, closed since 29 June. However, restrictions and capital controls will remain in place, although slight relaxations Athens announced.
The limitation of the withdrawal of cash was set at 420 euros per week instead of 60 euros a day, so that citizens can take greater amounts of money at once, without having to queue every day against the cashier. Tsipras government remains concerned that a massive capital flight takes place.
Athens approved exceptions for citizens who have to pay for medical care or study abroad.
The economic situation the country is very precarious, despite the emergency loan 7000 million it expects to receive. These funds will disappear quickly with repayment of 4.2 billion euros to the European Central Bank (ECB) and arrears of about 2000 million to the International Monetary Fund (IMF) payments.
Weakened by years of recession, the economy Greek today will face a strong fiscal impact. Parliament approved a reform of VAT, as he committed to its partners a week ago in a tense EU summit, in exchange for a new aid plan for the medium term.
Only medicines, books and the theater will benefit from a tax cut to 6% from 6.5% in effect. Hotels passed to the intermediate level of 13% after the summer. The mainly the frescos- basic foodstuffs, water and energy will be taxed at that level today.
A non-perishable goods, meanwhile, will be under the new VAT of 23%, like public transport, taxis, restaurants and other services. The Executive of the leftist Tsipras and expected annual additional revenue of around 2.4 billion euros from 2016 and 795 million this year.
It remains to what extent traders and suppliers of services will affect these increases in consumer prices or whether they will cut their profit margins.
The application of the increase in VAT is the first measure of government austerity Tsipras, who will not have respite after this reform, as the agreement reached in Brussels requires Athens vote Wednesday at the latest new austerity reforms. Measures will be another political challenge for Tsipras, who have suffered several casualties in his party, Syriza, during the parliamentary vote of VAT and that, according to experts, will fail to avoid a snap general election.
Regarding the country’s creditors, they should launch a third plan for Greece of more than 80,000 million euros in three years, as promised by Brussels, and it must first overcome their differences.
As an example of the frictions, the French finance minister, Michel Sapin, denied in an interview published yesterday the idea defended by his German counterpart, Wolfgang Schäuble, a temporary exit of Greece from the euro zone. “You talk about something that may not exist. Or leave the euro or remains in it,” Sapin said the Greek weekly To Vima.
Agencies AP, AFP and Reuters .
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