The Greek Government today released the draft agreement sent to creditors which includes a reform of the pension system and the value added tax (VAT).
The Executive Alexis Tsipras pledges to save the pension system between 0.25% and 0.5% of GDP in 2015 and 1% from 2016. The proposal raises the restoration VAT from 13% to 23% and reduces the minimum rate of 6.5% to 6% for medicines, books and theater.
The text contains a pension reform that aims to save between 0.25% and 0.50% of gross domestic product (GDP) for 2015 and 1% a year from 2016 through early retirement penalty and progressive increase until 2022 retirement age to 67 years or a minimum of 62 years with forty quoted work.
It also increases the contribution by pensioners to the health system from 4% to 6%. The subsidy for the lower pension (EKAS) disposed at the end of 2020, when it provides for other aid.
In addition, supplementary pensions phased out gradually until December 2019. On VAT besides the reduced rate is 13% fixed for basic food, hotels, energy and water, 23% for the rest, including restoration, which it is currently applied by 13%.
In the Aegean islands which now enjoy a discount of 30% on VAT rates will be dropped from October 2015 in the richest islands and more influx of tourists and is excepted to remote islands.
This process will be completed in late 2016 with fiscal measures to compensate the people with the greatest needs and reflects that the new VAT rate for hotels will be implemented from October 2015.
The plan also includes an increase of 26% to 28% of the business tax, while noting that the new law regulating collective agreements should be ready for the last quarter of the year.
In the given the Government is also committed to reforms in public administration, the judicial system and to fight corruption. The text, however, does not include any mention of the debt restructuring, as requested by the Executive.
Government sources, however, stressed that the Greek proposal to the European Stability Mechanism (ESM) this Wednesday refers to “the financial needs of the country from July 1, 2015 until the 30th of June 2018, ie for three years and also includes debt reform, an investment package of 35 billion euros “.
The parliamentary group of Syriza meets early today to discuss reforms and hours later there will be a special session of Parliament to discuss the proposal and give Tsipras a mandate to negotiate with creditors .
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