Greece prepares reform bill ahead of first bailout review

Greece prepares reform bill ahead of first bailout review

The Greek parliament will vote this week on an omnibus bill cutting pensions, raising the retirement age and increasing punishments for tax evasion ahead of the country's first bailout review later this month.

Athens hopes to conclude the review and recapitalise its banks quickly, to secure fresh aid and talks on debt relief. But it must first enact a long list of reforms detailed in the 86-billion-euro bailout plan.

The bill on a first set of reforms will go to parliamentary committees on Tuesday with a plenary vote due by Saturday, officials said. Prime Minister Alexis Tsipras' parliamentary group will discuss the bill behind closed doors on Monday.

Inspectors from the European Commission, European Central Bank, eurozone rescue fund and International Monetary Fund are expected in Athens this month to assess progress on the aid deal agreed in August, Greece's third international bailout.

Tsipras wants talks on restructuring Greece's massive debts – set to exceed 180 percent of GDP this year – to start before the end of the year. He has said Athens aims to wrap up the review in November and the bank recapitalisation in December.

The chairman of eurozone finance ministers said last week that its biggest creditor governments agreed Greece should spend no more than 15 percent of GDP a year on debt servicing but that details of how relief should be granted must be negotiated.

The bill does not include details on the terms of the bank recapitalisation, which the government hopes will protect deposits and clean up bad loans. Officials said the government would present separate legislation on the financial sector soon.

The draft law gradually raises the retirement age to 67 years by 2022 and cuts pensions by 10 percent for people below that age who have already retired but have yet to reach 67.

The government has promised to present a comprehensive pension reform plan by December. A panel on the pension system's viability is due to issue its report this week, taking into account demographics and the deterioration in employment during years of crisis in which the economy shrank by a quarter.

The bill also raises tax on property rental income retroactively from Jan. 1, 2015 and imposes stricter fines on tax evasion, which according to government estimate deprives the state of up to 20 billion euros ($22.74 billion) a year.

Those found guilty of tax evasion face up to two years in prison and their bank accounts can be seized.

“The party is over,” Tsipras told SYRIZA members on Saturday, saying that fighting tax evasion and corruption were a top priority.  “The predators, those who owe the Greek people, will appear one by one at the counter to pay the bill.”


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