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On the abolition, by 2016, the time claimed discount on VAT for Islands , with the ‘ only exception of “remote”. Tax increase also for Restaurant and Hotel . Privatization of the ports of Piraeus and Thessaloniki, with races to be banned by October. Minor defense cuts , to wink at the right-wing party Anel that governs with Syriza. More tax on luxury goods and elimination of notorious tax exemptions for owners . But also cuts baby pensions and a comprehensive reform of the pension system, which the government recognizes as “unsustainable”. These are the main proposals by the executive sent to Alexis Tsipras all ‘ Eurogroup , in the hands of President Jeroen Dijsselbloem . The plan, which between cuts and taxes worth about 12 billion, was written with the support of a team of French technicians sent by the government of Francois Hollande . And in fact largely follows the requests made of creditors during the last meeting of finance ministers before the “break” marked by the convening of the referendum . Not by chance from Paris, Rome and Brussels arrive signs of optimism, with Dijsselbloem speaking proposal “ careful and complete”, Hollande’s proposals “serious and credible” and the president of the European Parliament Martin Schulz that defines “good proposal” that put forward by the government. The European markets, which seem to believe in a possibility of agreement, have also closed today in all positive with the Milan Stock + 3% and the yield spread between Italian government bonds and German 10-year fell to 121 against 144 basis points on Thursday. While Tsipras, strong support came from voters last Sunday, now opens the home front, with the left wing of Syriza contrary to an agreement on this basis.
Assessment by former troika “by tonight” – The evaluation of the plan by the former troika will by tonight , along with the examination on sustainability debt conducted by the Commission and the ECB. Everything will then be sent to the chancelleries to be evaluated Saturday by a Euro Working Group (the meeting of deputy finance ministers) and the Eurogroup, which will have to decide whether what was promised by Athens is enough to give the green light to new loans. Sundays are in the calendar Eurosummit and the meeting of heads of state and government of the 28 EU countries. European sources in the morning they did know that if tomorrow we will reach an agreement the two leaders could be sconvocati. But Berlin , contrary to the renegotiation of the debt, has instead insisted that the 28 will still be necessary because the issue also concerns countries that are not part of the eurozone and is therefore “reasonable” together. Without agreement, it is unlikely that from Monday the ECB will continue to provide cash emergency to bank Greek, closed since Monday of last week. At that point the institutions would be doomed to failure. Even in case of approval of the new aid, then, the rescue plan must be approved by the parliaments of Germany, Netherlands, Finland, Austria, Slovakia and Estonia.
The banks, as revealed in Reuters to a banker, will still need cash for 10 to 14 billion of euro, even if it were agreed. National Bank , Piraeus , Eurobank and Alpha , which are worth 95% of the market, will have to be recapitalised and not return to normal for months. To act on this front could be the fund ESM, through its Direct Recapitalisation Instrument (Dri), has never before been used.
But it also serves the green greek Parliament. And the left wing Syriza is against – The real problem of Tsipras is now the home front: the very possibility of using the proposal as a basis for restarting negotiations with the former troika will have to be approved by Parliament , in which the government is referring Tsipras on the latest developments. It ‘true that the Prime Minister can count on a large majority, but some forty parliamentarians of the left wing Syriza are opposed to new concessions to creditors. The energy minister Panagiotis Lafazanis , which belongs to the extreme left, has already said that “the government’s proposals are not compatible with the program of Syriza” . Five members of the radical wing, the so-called Platform Left , also presented to the Prime Minister a four-page document in which they ask the Grexit and return to the drachma . While the former Minister of Finance Yanis Varoufakis announced on Twitter will not be in Parliament to vote “for family reasons”.
Tsakalotos “Committed to remain in the euro and to respect the rules, give us time and space” – Neither the letter signed by Tsipras nor signed by the new Minister of Finance Euclid Tsakalotos , the accompanying document with the proposed reforms, made mention of a cutting debt , but explicitly requested in the message with which the Prime Minister has asked the rescue fund ESM the activation of a new aid program for three years, the value of which, according to Bloomberg , will amount to 53.5 billion of euro . Tsakalotos writes instead that the government is “committed to remain a member for all purposes rispetttare Eurozone and the rules of the monetary union.” The letter ends with the admission that the commitment to “change our society, our economy and our state can appear Herculean”, but “we are fully dedicated to implement these reforms in their interests and ask the partners to give us space and time for these changes “.
The proposals on the table – The plan calls for a primary surplus 1% of GDP this year, 2% in 2016, 3% in 2017 and 3.5% in 2018 through a conjunction of taxes and cuts. The VAT rate will be unified to the standard level of 23% for restaurants, while 13% will remain only for food, energy, hotel and water. The super discounted rate to 6% will continue to be applied only to drugs, books and theater. What is most striking, because it denies the rumors published Thursday by the Greek press, is that Tsipras gives on tax breaks for the islands. So far always in defending the grounds that it is not easy to reach and affected by the difficulties in supply. It meets the demands of creditors also the elimination of tax exemptions granted so far by the Constitution to the caste of shipowners, which in fact are already looking with interest on Cyprus. The cuts to the Defense rose to 300 million euro by the end of 2016, from 200 proposed in June. But creditors asked to reduce spending by 400 million.
Among other measures, there are also increased from 10 to 13% of the tax on luxury goods and 26-28% (not the 29% initially proposed by the government greek) than on business. The farmers lose their favorable tax treatment. It is not ruled out an increase in the tax on estate “as necessary to maintain the level of income” after the scheduled revision cadastral . To increase tax revenues, the government agrees to establish an independent body responsible for the collection.
In terms of pensions the government recognizes that the current system is “unsustainable” and is committed to drastic changes which will It expects to save between 0.25 and 0.50% of GDP in 2015 and 1 percent year on year in 2016. On the plate are then put disincentives to baby pensions gradually until you get to an age of exit from work of 67 years or 62 with 40 years of contributions by 2022 (with exceptions for professions strenuous and for mothers with children disabled ), effective immediately. The introduction of new parameters for the calculation of pensions more closely linked to contributions. The plan also abolishes the solidarity contribution for pensioners by 2019.
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