Tuesday, June 23, 2015

Greece: proposals and timetable for Euro Summit – SPIEGEL ONLINE

The really important and sensitive issues are resolved in the EU most at the last second. In this respect, it fits the debt dispute with Greece that so far no agreement is – although next week the current aid program expires.

Also, the summit of Heads of State and Government on Monday evening in Brussels brought no breakthrough – a Greek default has not yet been averted. But at least the government in Athens has placed new austerity proposals on the table. And the euro partners see this as obviously a basis for further negotiations.

What proposals did the government of Prime Minister Alexis Tsipras? What is the timetable for an agreement? And what policy issues are still open? The most important questions and answers at a glance:

  • What offers Greece submitted

In twelve pages the government in Athens explained further tax increases and spending cuts. The measures are expected to contribute five billion euros in the coming year and a half and cover the following areas:

The budgetary objectives to Greece and the donors have already agreed on the key points, according to diplomats. The primary surplus – ie the budget balance excluding debt service – to 2015 at one percent of gross domestic product (GDP) are. Next year, at two percent.

Athens is ready, the increase value added tax in the tourism sector (hotels, taverns and cafes) to According to government sources. The creditors had demanded to raise the value added tax for hotels and restaurants to the standard rate of 23 percent. Lowest VAT rate of six per cent should only apply to books and medicines. For the current average rate of 13 percent will apply.

In other areas, the Greek government is now apparently ready for higher taxes . Businesses should pay higher taxes from 2016, the tax rate is expected to rise by 26 to 29 percent. In addition, a special tax of twelve per cent on company profits is planned with more than 500,000 euros. The “solidarity tax” on income for individuals over 50,000 euros per year should also be raised. The taxes on luxury items such as cars with a lot of displacement, swimming pools, private planes and boats of an overall length of ten meters are expected to rise. Should also be introduced taxation of income from online gambling.

A big point of contention between Greece and the financiers is the pension system . Here, the government in Athens has now apparently willing to abolish mechanisms of early retirement from the beginning of 2016. In addition, supplementary pensions of more than a thousand euros to be cut – but they are in any case rarely

The Greek government is committed to further privatizations as of ports or airports.. However, conditions are mentioned, such as the involvement of the public sector at the purchaser’s capital commitments of the investors for the local economy and the protection of workers’ rights. A privatization of the electricity network operator Admie and state shares in telephony operator OTE precludes the government.

The government wants the military spending In addition to 200 million euros slash , Greece has a comparatively large defense budget.

The Greek Government also says action in the fight against corruption and the abolition of certain monopolies.

  • What contentious issues are still open?

Although Greece has made offers, but the lenders now want to Once count if the planned cuts and Tax increases would be adequate. The new proposals Athens were still not specific enough, said the head of the International Monetary Fund (IMF), Christine Lagarde

In addition, there are two issues between the negotiating parties over which the donors so far do not want to speak openly:. The question of rescheduling and option on a third aid package .

The international donors have granted Greece two utilities with a total of around 240 billion euros. “There will be no third program,” French President Francois Hollande said after the summit deliberations. Instead, should ensure a “permanent agreement” that the Euro Group and the leaders did not have to discuss Greece again in three or six months.

Also, Chancellor Angela Merkel said: “We have talked about no third program.” The theme of restructuring have also played a role. From Athens came in debt dispute again the demand for a haircut. “It is not at issue that we restructure debt in the sense,” Merkel said. Even European Commission President Jean-Claude Juncker said that it currently was not the time to talk about debt relief for Greece. France’s Hollande said about it could be spoken only in a second phase.

  • What is the timetable for an agreement from?

President Juncker made it clear that it now needed to go quickly. “I am convinced that we come to a final agreement later this week, for the simple reason that we have to reach an agreement this week,” he said.

Until Wednesday night should Experts from the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) the new reform proposals of the Greek government Check . Then another Meeting of Finance Ministers of the euro area is set. They should remove the final hurdles. If the Euro-group shall give its advice on the package, the EU’s 28 leaders could agree on that basis also. Because the EU summit is already for this Thursday stated .

In Germany would then have also the Bundestag in summary proceedings nor the extension of the aids agree

Without agreement the support program for Greece is 30 June -. And therefore the prospect of further billions in aid. In eight days the government in Athens has more than 1.5 billion euros from the International Monetary Fund (IMF) Money Transfer – otherwise the country risks bankruptcy and subsequently possibly also the depreciation of the euro

Many last chances – citations for Greek crisis

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