Armageddon on the way to Greece! Measures that will crack down pensioners and debtors to the government and will affect wages and recruitment in the public sector are included in the so-called “updated bailout agreement” Greece’s creditors sent to the Finance Ministry on Sunday.
According to daily Kathimerini that published the draft the measures are:
strict monitoring of civil servants and their salaries until 2020
new interventions in the social security system
automatic confiscation system for assets belonging to those with debts to the state as of 1.1. 2017
new cuts to retirement lump sums
recalculation of all pensions up to the end of 2017
cuts of 430million euros in poverty allowance (EKAS) in 2017
set the base of contributions for self-employed to the net amount, after deduction of expenses and social security contributions
extension until the end of March 2017 (instead of 31/12/2016) of the obligation to harmonize disability rules, and the contributory welfare benefits in budget neutral way.
cooperation of the tax and social security authorities with a private company for the collection of expired debts
Cut number of personnel (by 20%) and directors (by 40%) at the new Single Social Security Entity (EFKA)
Voting on the midterm fiscal plan for the 2017-20 period is among the milestones for the second review of the country’s third bailout, and the creditors insist it must set “limits on salary expenditure and the number of civil servants that are consistent with the achievement of the fiscal targets.” The 2017 budget already provides for savings of 23.8 million euros from the rationalization of the civil service, while further interventions have not been ruled out.
This proposal has come despite the government’s pledge that the social security issue is closed, and it will make negotiations on the labor reform even more complicated.
It even allows for a delay in the full operation of EFKA (originally scheduled for January 1), saying that all administrative procedures will have to be completed by March 2017.
The draft agreement further dictates the introduction of an automatic system of confiscations for taxpayers with expired debts to the state that will have to start operating from 2017. The creditors insist that the strategic plan for the collection of arrears to the state must be completed by the end of this year, with expired debts having come to 92 billion euros. Any debts that are deemed impossible to collect should be written off, the creditors added.
They are also demanding a deadline of June 2017 for the compulsory use of credit card terminals (POS) by enterprises and self-employed professionals in professions considered high-risk for tax evasion. Another demand concerns the adjustment by June of property prices used for tax purposes, known as “objective values.”
PS naming the draft “updated bailout agreement” is nonsense as it is just the second stage of the Bailout Agreement signed between Greece and its European lenders in August 2015.