Heavy workload for next finance minister

Heavy workload for next finance minister

Within October, the new government will have to decide on a package of measures worth between 3 and 5 billion euros to be implemented next year. It must also legislate on a series of other interventions that will apply in 2017 and 2018.

Meanwhile, the Euro Working Group of senior eurozone finance ministry officials will convene on Thursday and draft the list of prior actions required for the disbursement of the 3 billion euros approved in August but which was frozen due to the elections.

One of the new finance minister’s first actions will have to be the tabling of the initial draft of the 2016 budget in Parliament by October 5. This will include the forecasts of the bailout agreement for a recession of 2.3 percent this year and 1.3 percent in 2016 and a primary deficit of about 0.25 percent in 2015 and a primary surplus of 0.5 percent next year. Any changes to forecasts and measures will be included in the midterm program and the final draft of the budget.

The Finance Ministry has an informal deadline of October 20 for the drafting of the midterm program, so that it can clear Parliament by the end of next month. This will include a description of all the new measures as well as the structural changes to be implemented in the coming years. The final draft of the 2016 budget must be tabled in Parliament by the end of November.

The new measures to be determined within October concern the second stage of the social security reform, securing savings of some 1.8 billion euros in 2016, the restructuring of income tax, and the increase in the tax rate on farmers to 20 percent in 2016 and to 26 percent in 2017, from 13 percent today. Other interventions will include the tax on TV adverts, the tender for the auctioning of TV channel licenses, the tax on video lotto terminals (slot machines), the increase in the tax on rental incomes from 11 to 15 percent for annual takings of up to 12,000 euros and from 33 to 35 percent for greater takings, and the gradual abolition of the special tax status for the shipping sector.

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