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Greece has to sell Eurobank to foreign investor, might keep emergency property tax under terms of new bailout deal

Greece might have to keep the unpopular emergency tax on property next year and will have to sell a stake in Eurobank, one of its four so-called systemic lenders, to a foreign investor, according to the finalized version of Greece’s memorandum of understanding with its lenders.

According to documents seen by Kathimerini, Greece will have to keep the emergency property tax next year if the government is unable to create a new, single tax on property by the end of September. If ready in time, the new levy will have to raise 2.7 billion euros in 2014. There is also a reference to the possibility of the property transfer tax being scrapped next year, in which case the government will have to increase revenues from other property taxes. The transfer tax brings in about 200 million euros each year.

The pact between Greece and its lenders also foresees the sale of a substantial share in Eurobank, which has assets of almost 80 billion euros, to a foreign strategic investor by the end of March 2014 at the latest. The government will have to find the investor by the end of October so due diligence can begin the following month.

Greece is also committed to making up any setbacks in its privatization process, such as the collapse of the deal to sell gas company DEPA, by speeding up the sale of its ports. The privatization target for this year is set at 1.6 billion euros, increasing to 2.7 billion euros next year, 3 billion in 2015 and 2.1 billion in 2016.

The new memorandum also finalizes the parameters for plans to reduce civil servant numbers. A total of 25,000 public sector workers will be placed in a mobility scheme by the end of the year. Of these, 12,500 have to be found by the end of September. This year, 4,000 civil servants will have to be fired and the total number of sackings will must rise to 15,000 by the end of next year. The government has also committed to completing organization charts for ministries by the end of September, when it will also have to finalize the criteria for evaluating which of the civil servants placed in the mobility scheme will be moved to other positions and which will be fired. The workers will be allowed to stay in the labor pool for a maximum of eight months.

ekathimerini.com , Thursday Jul 25, 2013 (21:06)  
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