BUSINESS

Bailout reforms Greece must take by end-2015

LEFTERIS PAPADIMAS

TAGS: Economy

Greece's leftist government will have to move fast to agree a new set of reforms to unlock a new tranche of aid under its 86 billion euro bailout deal.

Prime Minister Alexis Tsipras wants a positive review that will release 3 billion euros more of help for the country by November and open the way for the debt relief negotiations.

Here are the main reforms Greece is required to do in the next few months:

FISCAL

- The government must adopt a supplementary 2015 budget, to prepare the draft 2016 budget and a 2016-19 medium term fiscal strategy.

- Phasing out the preferential income tax treatment for farmers - now 13 percent - with rates set at 20 percent in 2016 and 26 percent in 2017 (Passed)

- Abolish a subsidy of tax on diesel oil for farmers in two equal steps in October 2015 and October 2016

- Impose a tax on television advertisements, put TV licenses to international tender and fees for broadcasting frequencies.

BANKS

- Must recapitalize the country's banks. It is estimated that the country's major banks - National Bank, Pireaus Bank, Alpha Bank and Eurobank - require up to 25 billion euros in recapitalization. Authorities are conducting stress tests to determine the capital shortfall which needs to be plugged now, in a bid to beat a Jan. 1 deadline when a bailout clause bringing in bank depositors comes into effect.

MAIN PENSION AND LABOR REFORMS

Pensions

- The authorities should legislate further reforms by October 2015 for the pension system to take effect from January in order to save about 1.25 percent of GDP by the end of 2016.

- The government must consolidate the main pension funds and gradually phase out a top-up solidarity grant to low pensions (EKAS) by December 2019.

- Clarify eligibility criteria for the minimum guaranteed pension after 67 years of age. Athens agreed in August to raise the retirement age for new pensioners to 67 years and to cut early retirements.

Labor

- The government will in October launch a consultation process with independent experts to review an existing labor market framework, including the right for firms to make collective dismissals, and regulate collective bargaining.

- By December 2015 the Greek authorities need to adopt a comprehensive plan to fight undeclared work.

OPEN MARKETS, PROFESSIONS

- By the end of the year the government must legislate or start the process to adopt dozens of pending recommendations of the OECD to open restricted professions like notaries.

- By October Athens must initiate a process to privatize the country's national electricity transmission grid company, known as ADMIE, unless an alternative scheme is provided with equivalent results in terms of competition.

[Reuters]
 

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