In an quite odd movement, the European Commission decided to release on Sunday, the creditors’ proposals it offered to the Greek government on 26. June 2015, that is before June 27th 2015, the Friday’s Eurogroup meeting.
The publishing of the creditors’ proposals are “in the interest of transparency and for the information of the Greek people” the EC says in statement accompanying the 10-page document.
Excerpt: 2. VAT reform
Adopt legislation to reform the VAT system that will be effective as of July 1, 2015. The reform will target a net revenue gain of 1 percent of GDP on an annual basis from parametric changes. The new VAT system will: (i) unify the rates at a standard 23 percent rate, which will include restaurants and catering, and a reduced 13 percent rate for basic food, energy, hotels, and water (excluding sewage), and a super-reduced rate of 6 percent for pharmaceuticals, books, and theater; (ii) streamline exemptions to broaden the base and raise the tax on insurance; and (iii) eliminate discounts, including on islands.
The increase of the VAT rate described above may be reviewed at the end of 2016, provided that equivalent additional revenues are collected through measures taken against tax evasion and to improve collectability of VAT. Any decision to review and revise shall take place in consultation with the institutions.
|European Commission – Press release|
Information from the European Commission on the latest draft proposals in the context of negotiations with Greece
Brussels, 28 June 2015
In the interest of transparency and for the information of the Greek people, the European Commission is publishing the latest proposals agreed among the three institutions (European Commission, European Central Bank and International Monetary Fund), which take into account the proposals of the Greek authorities of 8, 14, 22 and 25 June 2015 as well as the talks at political and technical level throughout the week.
Discussions on this text were ongoing with the Greek authorities on Friday night in view of the Eurogroup of 27 June 2015. The understanding of all parties involved was that this Eurogroup meeting should achieve a comprehensive deal for Greece, one that would have included not just the measures to be jointly agreed, but would also have addressed future financing needs and the sustainability of the Greek debt. It also included support for a Commission-led package for a new start for jobs and growth in Greece, boosting recovery of and investment in the real economy, which was discussed and endorsed by the College of Commissioners on Wednesday 24 June 2015.
However, neither this latest version of the document, nor an outline of a comprehensive deal could be formally finalised and presented to the Eurogroup due to the unilateral decision of the Greek authorities to abandon the process on the evening of 26 June 2015. (source: europa.eu)
The 10-page document is at the bottom of the Press Release in Adope in List of Prior Actions -Version 0f 26. June 2015
Excerpt: 4. Pension reform
The Authorities recognise that the pension system is unsustainable and needs fundamental reforms. This is why they will implement in full the 2010 pension reform law (3863/2010), and implement in full or replace/adjust the sustainability factors for supplementary and lump-sum pensions from the 2012 reform to achieve equivalent savings and take further steps to improve the pension system.
Effective from July 1, 2015 the authorities will phase-in reforms that would deliver estimated permanent savings of ¼-½ percent of GDP in 2015 and 1 percent of GDP on a full year basis in 2016 and thereafter by adopting legislation to:
create strong disincentives to early retirement, including the adjustment of early retirement penalties, and through a gradual elimination of grandfathering to statutory retirement age and early retirement pathways progressively adapting to the limit of statutory retirement age of 67 years, or 62 and 40 years of contributions by 2022, applicable for all those retiring (except arduous professions, and mothers with children with disability) with immediate application; adopt legislation so that withdrawals from the Social Insurance Fund will incur an annual penalty, for those affected by the extension of the retirement age period, equivalent to 10 percent on top of the current penalty of 6 percent;
integrate into ETEA all supplementary pension funds and ensure that, starting January 1, 2015, all supplementary pension funds are only financed by own contributions;
better target social pensions by increasing OGA uninsured pension;
Gradually phase out the solidarity grant (EKAS) for all pensioners by end-December 2019. This shall start immediately as regards the top 20% of beneficiaries with the modalities of the phase out to be agreed with the institutions;
freeze monthly guaranteed contributory pension limits in nominal terms until 2021;
provide to people retiring after 30 June 2015 the basic, guaranteed contributory, and means tested pensions only at the attainment of the statutory normal retirement age of currently 67 years;
increase the health contributions for pensioners from 4% to 6% on average and extend it to supplementary pensions;
phase out all state-financed exemptions and harmonize.
Now what is this? A move by the European Commission to pick up the negotiations or a move to undermine the Referendum? Or just make it easier for Greek English-speaking voters to decide for YES or NO next Sunday?
I suppose, the EC should have translated the document into Greek, n’ est pas?
PS I must admit it reminds me a little be of the Cold War tactics when Radio Free Europe was addressing the people in the communist states and airplanes were throwing leaflets over red villages. so according to slogan “Greek people! Greek people! Your government is lying to you!”. I’ve seen such tactics in the movies …