Athens preparing reform proposals for Eurogroup

A collection of reform proposals are being put together by the government so Finance Minister Yanis Varoufakis can present them at Monday’s Eurogroup, with Athens hoping that this will help it secure part of the remaining 7.2 billion euros in bailout installments.

Government sources said on Tuesday night that the six proposals Varoufakis is due to present will be measures to tackle the humanitarian crisis, administrative reform, a new scheme to settle overdue debts to the state, changes to tax collection, the creation of a fiscal council (a nonpartisan body to monitor and advise on fiscal policy) and the setting up of a new body for targeted tax inspections.

The measures are due to be put forward at the Euro Working Group on Wednesday or Thursday but the Greek government is hoping that eurozone finance ministers will deem the proposals enough to pave the way for the release of some funding to Athens within March.

Varoufakis is also likely to be prepared to discuss with his counterparts what privatizations the government is willing to carry out. The finance minister said in an interview on Star TV on Monday night that he is in favor of further private investment at Piraeus port and in the Greek railway network. State Minister Alekos Flambouraris said on Tuesday that the coalition would not consider selling the country’s water or electricity firms.

The preparation for Monday’s Eurogroup has led to the government making changes to some of the legislation it had planned. For instance, the provision for giving debtors a haircut on the principal they owe to the state has been removed from the legislation introducing a new payment plan for overdue taxes and social security contributions.

There is even a possibility that the dreaded ENFIA property tax will remain for another year, albeit reduced by 15 to 20 percent. The government wants to replace it with a levy on large property but will need to ensure it can raise revenues of 2.6 billion euros to do so. A new formula has not been found yet.

The coalition has, however, finalized the legislation aimed at tackling the social impact of the crisis. The bill foresees households in “extreme poverty” receiving free electricity for a year. This is estimated to affect 150,000 families. The draft law also provides a rent subsidy of between 70 and 220 euros per month for up to 30,000 households. Furthermore, food coupons will be provided to up to 170,000 families. The total cost of these interventions is estimated at 200 million euros.

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