FT.com, June 26 2015 Leaked: Greece’s new bailout counterproposal by Peter Spiegel
Athens’ final counterproposal to its trio of bailout monitors would re-impose many of the large-scale corporate taxes and pension contributions that creditors demanded be stripped out amid concern it would plunge Greece into a deeper recession. According to a copy, distributed to eurozone finance ministers Thursday and obtained by the Financial Times, Athens has stuck with its demand for a one-time 12 per cent tax on all corporate profits above €500,000, a measure the government estimates will raise nearly €1.4bn by the end of next year. In addition, it would raise employer contributions to Greece’s main pension fund by 3.9 per cent and would more slowly implement measures to raise the country’s retirement age to 67 and “replace” rather than phase out a special “solidarity grant” to poorer pensioners. We have posted a copy of the Greek counterproposal here. (http://blogs.ft.com/brusselsblog/files/2015/06/Prior-Actions-_institutions_modified_4-_1_.pdf) Greece’s bailout creditors – the International Monetary Fund, European Central Bank and European Commission – eliminated the one-time profits tax and the increase in employer contributions to the pension system in their offer to Athens yesterday, arguing that such heavy levies on companies would severely hit economic growth. It also pushed for more aggressive timeline for raising the retirement age and cutting the special top-up for poorer pensioners. Still, the Greek plans contain some key concessions from the original proposal submitted by Alexis Tsipras, the Greek prime minister, to creditors in an offer made on Monday. Although legislation raising the retirement age would not be implemented until the end of October – creditors want it to kick in immediately – it accepts the 67-year retirement age should be hit by 2022. Originally, Athens was proposing 2025. In addition, Mr Tsipras’ original proposal would have phased out the “solidarity grant” – known by its Greek acronym EKAS – by 2020; it now aims to “replace” the top-up payment by 2018, though it does not specify what the replacement would be. In other areas, Athens appears to have reversed itself on previous concessions. Mr Tsipras’ original plan would have ended special exemptions for Greek islands from the country’s value-added tax scheme, a politically touchy issue because of the high cost of living in some remote islands. The new proposal reverses that concession, maintaining a 30 per cent discount on the islands. On other VAT issues — which, next to pension reforms, has been the most contentious point between the two sides — Athens and its creditors remain far apart. The new Greek plan moves all food into a reduced 13 per cent VAT bracket; creditors had insisted only “basic food” fall under the lower rate while processed foods were charged at the normal 23 per cent rate. In addition the two sides continue to disagree whether hotels should be in the higher bracket; creditors want it in the 23 per cent bracket, while the Greek proposal would move it to the 13 per cent rate to protect the country’s vital tourism industry. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
