ECONOMY

Summary of Greek reforms needed for bailout

summary-of-greek-reforms-needed-for-bailout

Greece and international lenders are rushing to put the final touches on a multi-billion euro bailout deal to keep the nation in the eurozone and prevent a financial meltdown.

Here are some of the details of what Greece is required to do for up to 86 billion euros in fresh aid.

‘Prior Actions’

Greek media reported on Monday that some of the “prior actions”, or measures required before bailout aid is disbursed, now under discussion include:

– scrapping tax breaks for farmers who now receive subsidised fuel

– tighter regulations on a repayment system in instalments for individuals owing back taxes to the state

– a gradual increase in a “prepaid” income tax mechanism that asks taxpayers ranging from the self-employed to small businesses to pay upfront on forecast income – increase in a 'solidarity tax' paid by earners in the 50,000-100,000 euro annual bracket to 6 percent from 4 percent.

Passed

Greece passed a raft of prior actions in July including:

– simplifying VAT rates and applying tax more widely

– cutting back on pensions and making the national statistics agency independent.

– measures to overhaul its civil justice system – adopting EU bank resolution and bail-in rules, applicable from Jan. 1 2016.

To come

Greece's bailout agreement is also expected to set a clear timetable for following measures:

– ambitious pension reform; product market reform including Sunday trading, pharmacy ownership, milk and bakeries; privatise electricity transmission network; review collective bargaining, industrial action and collective dismissals; strengthen financial sector, including action on non-performing loans and eliminate political interference.

Greeks will also have take the following actions:

– privatisations – involving transfer of assets to an independent sovereign wealth fund in Greece designed to raise 50 billion euros, three-quarters of which would be used to recapitalise banks and to decrease debt

– cut costs of public administration and reduce political influence over it.

[Reuters]