Greece presents new bailout proposals

Greece new bail out proposals

Greece have outlined their latest VAT proposals since the ‘No’ referendum last Sunday, so far their main points include:

• Cuts to military spending.
• VAT changes.
• Corporate tax increases.
• Raising retirement age to 67.
• Crack down on tax fraud.
• Increase tax on shipping companies.

The key VAT points are:

• 30% relief for Greek islands to be scrapped – only the most remote islands will keep these tax breaks.
• Restaurants and catering services VAT will rise from 13% to 23%.
• Reduction of the 6.5% to 6%, now only applicable to books, theatre admission and certain medicines.
• A Reduced 13% tax on basic foodstuffs.

In return, it is asking for a €53.5bn (£38.5bn) bailout from the European Stability Mechanism (ESM), the EU organisation that provides financial assistance for Eurozone members.

So far most reactions to the new proposals have been positive but, with the leaders of the EU member states expected to continue discussions this coming Sunday, some see these new plans as the Greeks caving into EU pressure. The reasons for this are the many similarities to the proposals rejected by the ‘No’ vote (not even a week ago), such as not wanting to scrap the 30% relief for the Greek islands.

See previous related eBiz Answers post here:
Greek financial crisis – Possible VAT Changes

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