October 6, 2015
Yesterday the Greek delegation presented in the Eurogroup the list of reforms for the next month. These reforms have to pass through the Parliament so that the next tranche of 3 billion euros can be released by the ESM.
Greek Minister of Finance Euclid Tsakalotos achieved to convince his counterparts on the reforms of his government. Unlike many Greek media insisting on number “48”, the package entailed 8 crucial proposals. The other 40 have already passed last August, when Syriza was suffering from internal rupture and before PM Tsipras called for snap elections on September 20. The list was presented yesterday by Bridging Europe, hours before the Eurogroup meeting.
Reform on the media landscape was a strategic priority for Syriza already since January. Due to tenuous bailout negotiations, the bill on TV licenses was postponed until lately. Essentially, it is about changing the rules of the game and inviting new players in the field, keeping these media groups that are financially health and robust, while internationalizing the puzzle. CNN, Al Jazeera and Russia Today could be among the new entrances.
The abolition of favorable taxation in the maritime sector can negatively affect the leverage and input of Greek shipping companies into the GDP. It might also urge others to change flag and adopt a cheaper one for the international routes, thus avoiding a painful taxation. The reduction on military expenses is a completely wrong decision, given that Greece is always faced with ongoing tensions in its eastern borders. In the context of a mutual budget reduction along with Turkey, this could be feasible, or after a firm commitment of the EU to increase presence in Greece’s borders, both in terms of addressing the refugee crisis and / or impede any security upheaval.
On the transactions side, the goal for expansive use of online payments in the place of using cash is a good effort to address tax evasion. Already Greeks have been adjusted into this mode, after the imposition of capital controls that force them use debit or credit cards for their transactions. Nonetheless, the gradual abolition of special VAT on fuel for farmers is expected to raise concerns and discontent in a sector that has suffered a lot these last five years due to austerity politics, improper EU funding, and also after the sanctions policy against Russia, one of the biggest importers of Greek agricultural goods.
The pension reform, especially referring to early retirement, is another reform that was about time to be addressed. Still, the Greek side is intended to move on step by step, trying to keep balances within a labor group that, in some cases, it has been generously treated by the Greek state with regards to the increasing benefit packages.
Nonetheless, there is another proposal that I can hardly understand: For those tax payers that have 3-month overdue payments, the relevant fiscal authority will publicly post the names of those being inconsistent onto the relevant registry boards. This, to be honest, should have been avoided as it goes against ethics of a modern state.
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Author : Dimitris Rapidis