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Proposals from Greece to explain how it will meet conditions for a new international bailout loan were received on Thursday by Jeroen Dijsselbloem, who chairs the Eurogroup of euro zone finance ministers.
It is understood that key elements of the new proposals are:
- Adopt legislation to reform the VAT system that will be effective as of July 1, 2015. 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
- The new VAT rates on hotels and islands will be implemented from October 2015.
- 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.
- 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;
- The Board of Directors of the Hellenic Republic Asset Development Fund will approve its Asset Development Plan which will include for privatisation all the assets under HRDAF as of 31/12/2014; and the Cabinet will endorse the plan.
