Greece submits new reform package to creditors

Greek government submits 26 page document to its creditors, detailing reforms government intends to make for release of new €7.2 billion funds

Updated Jul 28, 2015

Greece has submitted a new list of economic reforms to its creditors to unlock a 7.2 billion euro credit so that the country can pay its debt on time.

The 26 page document is the most comprehensive package so far and mostly relies on elimination of tax evasion and fraud to raise state revenues between 4.6 to 6.1 billion euros this year.

Two biggest items on the list intended to raise tax revenues are intensification of audits on lists of bank transfers and offshore entities, which is expected to increase revenue up to 875 million euros, and introduction of a value added tax lottery scheme which is expected to create up to 600 million euros of revenue this year by encouraging consumers to demand receipts when they are shopping.

The Greek proposal also foresees 1.6 billion euros of non fiscal revenue from privatizations this year.

However, the socialist government is also increasing expenditures by at least 1.1 billion euros with new social security reforms to appease its voters.

The international creditors of Greece - European Central Bank (ECB), European Union (EU) and International Monetary Fund (IMF) - should approve the Greek proposal for funds to be released.

Previous proposals by the Greek government were returned by creditors as they lacked detail and substance.

European officials say they expect the deal to be approved by the next finance ministers meeting April 24, but some have raised concerns that Greece may be unable to make its 450 million euro debt payment to IMF April 9.

Greek officials denied earlier reports that they would not be able to pay their IMF debt if new funds were not released.

Eurozone finance ministers had an initial discussion about the reform proposal on the phone and said it is still unsatisfactory and any agreement before the finance ministers’ meeting is very unlikely.

The Greek proposal fails to meet creditors’ demands about labor market liberalization and pension system reform.

Indeed, the document states the government will spend an extra 600 million euros by reintroducing a so-called 13th pension pay for low income pensioners.

However, the government also makes concessions by promising to continue existing privatization procedures and to consider future privatizations “on a case-by-case basis,” despite public demands by some Syriza party members to stop all privatizations.

TRTWorld and agencies