MEXICO CITY, Mexico, in July. 9 2015.- Greece is preparing a reform package worth 12 billion euros (mde) in two years, more than expected, in an effort to offset a return to recession after months of failed negotiations with international creditors, the Greek daily Kathimerini reported.
The leftist government of Prime Minister Alexis Tsipras must submit proposals today and tomorrow of “valid and credible” reforms in exchange for financial aid to avoid a potential output Greece in the Eurozone.
“It is estimated that by 8000 mde measures that Greece had submitted for 2015 and 2016 will have to increase in 2000 mde a year, bringing the total to 12 000 mde for two years, “Kathimerini reported.
Greece was recovered last year from a deep recession that contracted gross domestic product (GDP) by a quarter over a period of six years, leaving a quarter of the unemployed labor force.
However, after months of uncertainty and two weeks in which its economy has been stuck by drastic capital controls, it is expected that the Greek GDP to contract by 3% in the year ., instead of growing 0.5% estimated earlier
Among the proposals involved in the reform package, the newspaper said, is an increase in corporate tax to 28% from 26%; a rise in VAT on luxury goods from 10 to 13%; a rise in VAT in processed foods, restaurants, transportation and some health services offered by the private sector to 23% from 13% and an increase in VAT in hotels 13% from 6.5% previously.
The report said the Greek islands continue to enjoy tax exemptions that creditors had tried to discard.
These drastic measures could now face resistance from the core of the ruling, Syriza party and its partner coalition, the Independent Greeks, after Tsipras came to power with the promise to say “No” to greater austerity.
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