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Greece’s proposals: new horizontal cuts to low-pensions?

The Greek additional proposal to the creditors has been leaked to the press. Athens offers earth and water – in creditors’ language “taxes and revenues” worth €7.899 billion for 2015-2016 that is in the next 18 months. Specifically, the Greek government aims to collect €2.697 billion until the end of 2015 and €5.207 billion in 2016.

Note that these measures below is only a part of the Greek proposals to creditors on Sunday evening.

Value Added TAX

Greece targets to collect €680million in 2015 and €1.360billionn in 2015 from Value Added Tax hikes. Athens proposes three levels of 6%, 13% and 23%.

Pensions & contribution increases

There will be early retirement restrictions as of 1.1.2016 with the exception of those who have already secured their retirement rights. 60 million EUR in 2015 and 300 million EUR in 2016

It will scrap the 3.9% reduction for pension contributions of IKA (private sector), a measure implemented last summer by the previous government. €350 million in 2015 and €800 million EUR in 2016

Increase of pension contribution for medical and pharmaceutical care: from 4% to 5% for  main pensions: 135 million EUR and 270 million EUR in 2016.

A 5% contribution to supplementary pensions. €240 million EUR in 2016.

Increase contributions for supplementary pensions from 3% to 3.5%.  120 million EUR in 2015 and 250 million EUR in 2016.

No scrap to poverty allowance (EKAS) but EKAS -replacement with some other allowance as of 2020.

greek proposal 22june


Special tax of 12% for corporate profit above €500 million

Increase tax rate from 26% to 29% for corporate profit

Increase of solidarity tax – no details –

Other revenue bringing measures

Decrease in Military expenditure €200 million in 2016

Tax on television advertisement €200 million in 2015 – 2016

increase in Luxury Tax

Taxes fro 4G and 5G licenses

sources: dimokratiki.gr, protothema.gr

Comment on Social contributions

I think there is something wrong here in the calculation: the contributions to pensions and healthcare (medical and pharmaceutical) have to go to the social insurance funds. They cannot go to the state registers in general. Can they?

Furthermore, if I read correctly the health care contributions increase in pensions, it means that the net main pension will be lowered.

Is this the equivalent measures the Government proposes in order to avoid pension cuts demanded by the creditors? A new horizontal cut?

If there is no exception for those with €350-€700 gross pension per month where even a euro less in month counts… Sorry, guys, I don’t think so… then the low-pensioners will be additionally burdened with the VAT hikes.

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  1. Just an observation: In April the government was estimating that tax on TV and electronic media (e.g., news website advertisement) can bring 50-70M euro during June-December 2015 (i.e., 7,14-10M euro / month). Now they are estimating the same measure will bring 200M in 18 months (i.e., 11,11M euro / month). That either means the tax rate they are proposing would be higher than what was envisioned in April, or the government thinks TV and electronic media will have higher advertising revenue. Of course, we are contributing to the latter by reading and posting on this web site, but I am not sure we do it to the extent the Greek government hopes.

    • Taking this analysis a step further: In early 2009 the three TV channels with the highest advertising revenue were Mega, Antenna and Star. Collectively, they had 37,23M euro / month advertising revenue, and accounted for just over 50% of the viewership:


      Assuming the level of TV advertising revenue has stayed the same (which is probably too optimistic given the GDP decrease since then), and is proportionate to the viewership (i.e., all the other channels made roughly as much in advertising revenue), then the government is planning to charge the TV channels around 15.5% of their advertising revenue. To emphasize — this is revenue, not profits.

    • …during June-December 2015 (i.e., 7,14-10M euro / month). Now they are estimating the same measure will bring 200M in 18 months (i.e., 11,11M euro / month).

      Which why these things are called estimates, you can (within reason) say what you like. Most do, because you can only be proven wrong afterwards…

    • Plamen von Palmen. You are simply too serious. That is only a piece of paper sent at midnigt and once again in early morning. It will not come thrue the Greek parliament anyway. Bankruptcy is Greek national sport – this one is 5th in their modern history. 1826, 1843, 1860, 1893 http://chaostrading.weebly.com/blog/a-history-of-greek-defaults

      They are just relaxed. Creditors asked for paper – they sent paper after half year of discussions about bullshit. And … they sent it twice shortly before deadline, to create more chaos. They are simply good in their national sport.

      • today we have 6th Greek bankruptcy, not 5th – I forgot one in1932.

        Historia magistra vitae

      • Austria-Hungary 1796, 1802, 1805, 1811, 1816, 1868
        Austria 1938, 1940, 1945
        Germany 1807, 1812, 1813, 1814, 1850, 1932, 1939, 1948
        Portugal 1828, 1837, 1841, 1845, 1852, 1890
        Russia 1839, 1885, 1918, 1947, 1957, 1991, 1998
        Spain 1809, 1820, 1831, 1834, 1851, 1867, 1872, 1882, 1936–1939
        United Kingdom 1822, 1834, 1888, 1932

        In the interest of impartiality of course.

      • Giaourti Giaourtaki

        Regarding your “source” the three powers that helped with Navarino were not called “troika”!
        Germoney went also bankrupt 5,6 times but without being at war with Turkey for 400 years, 2/3 of Greece still occupied by Turkey and for the 1/3 free part of Greece Greeks had to pay reparations to the Ottomans. If historians would put the Balkan wars as the beginning of World War One every school-kid would know about this.
        The Indians would be also bankrupt when they’d kicked out the Europeans and freed Amerikkka after 400 years and need a lot of weapons to buy to send also the Canadians back to Europe.
        For all your mentioned years you should take a deep look into history and how can Greece be broke before it’s independence? One of your bankrupts was also related to a catastrophe in France and deals with the prices of raisins.

        • Look at the Credit Suisse table – my link above. It is probably the most accurate data I found yet.
          Do not play victim. Irish, Bulgars and many other nations have also very difficult history, but in Austria they do not say 5/6 of their country is occupied by Croats, Slovinians, Czechs, Slovaks, Magyars…

    • Giaourti Giaourtaki

      Pearls before swine as the private TV-stations already decided to pay fees just nothing at all and threaten that otherwise thousands will lose jobs.
      btw: 40.000 will lose their jobs in catering for VAT hikes

  2. World War 2 was about ASSET STRIPPING the wealth from the wealthy Europeans.
    Germany & the Bankers who funded World War 2 even killed people so as to collect on their life insurance policies.
    How did they know ?
    The banks owned the insurance companies.
    Factories were stolen
    Shops were stolen
    Whole estated, Land, Farms, peoples whole identity was stolen.
    Today it is asset stripping without the actual fighting.
    Maybe the cull of human livestock will come later ?
    At the begining it was claimed that ‘Greece could be about to elect the most radical government of the left in Europe since the 1930’s.
    Ha, ha, ha, ha, he, he ha, ha, ha, ha.
    As soon as SYRIZA took office they ran to their elite buddies of the EU for a group hug.
    Shmucks one & all.

  3. I think there is something wrong here in the calculation: the contributions to pensions and healthcare …

    I think you are reading this wrong. Indeed, those contributions must go to the various pension funds, but the contributions are still “public revenues”. With you all the way on the VAT observation though. Any increase in tax, VAT or otherwise, is indeed a further erosion of available income. It would seem that some red lines are not as red as they should be…

  4. sorry, I forgot one Greek bankruptcy in 1932 – so today we have 6th

    • OK, this I is not very relevant I would say.
      There are quite a few countries in Europe with the same number or even worse e.g. Spain (1809, 1820, 1831, 1834, 1851, 1867, 1872, 1882, 1936-1939), Austria and predecessor Austria-Hungary (1802, 1805, 1811, 1816, 1868, 1938, 1940, 1945) etc
      This is history, and we should leave it there.
      The main problem here is that we live in country with a lot of structural problems and in my opinion most of them were not imported, but are “born and raised” here in Greece. All four pillars (on which every country is based… law, health, education, police) are deeply disturbed by corruption, favoritism on party levels, nepotism etc etc.
      And until this is not realized by Greek people there is no way that it can be fixed… because fixing these things can only come from inside. All the problems have been covered by constant fresh money from abroad all these 30-40 years… but now all of them emerged cause there is no fresh money to cover it. My opinion is that even if troika forgives all the debt… Greece will still struggle, because of all the above, and not because Greece got bankrupted couple of times during their deliberation war from Turkey.

  5. I am wondering whether this is just posturing by Stratoulis (and his bill is not going anywhere), or Tsipras just found a way to collect additional 300+M in taxes


  6. Finally a (small) step in the right direction….

  7. Most of the wealthy in Greece got there by criminal activity. Again, they get a free pass. Stupid greeks.