The Greek government gradually adheres to the reactionary policies of the EU aiming to speed up procedures, to implement the agreed measures and eventually give a solution to the liquidity problem.
The government aims to improve the efficiency of tax administration, increase tax “collectibility,” and confront tax evasion.
These were some of the topics discussed during yesterday's cabinet meeting. During the 5 hour meeting the president of the Economic Advisor Council Giorgos Houliarakis informed the ministers of the developments on Monday's Eurogroup and received government approval to further expedite consultations in order to reach a mutually beneficial agreement with Greece's creditors.
Announcements made by Greek officials after the meeting made clear that "the government's legislative work will be developed according to the progress made in negotiations". Drafting of new legislation has already been made but more time is needed to deal with practical problems, reliable sources within the government say.
Negotiations will continue in today's Brussels Group with the Greek government saying it will not back down from its red lines, but is doing all it can to agree a deal. As Greece's international creditors push for more action the Greek government needs to reach a political deal with Europe over the country's debt crisis. The first step, towards reaching an agreement, can be made at the European summit meeting in Riga on May, 21. Meanwhile Athens wishes for a new Eurogroup meeting to be held on May 22, in order to to complete of the necessary procedures and ratify the final agreement.
The "key" points of the deal
Besides the amount of the primary surplus and the fiscal gap, there are still issues that creditors consider key to reaching an agreement:
- VAT Rate: The Greek government opts for a flat rate of 15%-16% while its creditors insist on a rate of 18%-19%.
- Pension system: A higher retirement age and pension cuts are two of the central demands of the creditors while the Greek government counterposes merging of insurance funds and elimination of early retirement benefits.
- Labor Market: The Greek government insists on the reinstitution of the right to collectively bargain while creditors push for collective redundancies and the implementation of and compliance with minimum wage policies.
Finally Athens and Brussels seem to have reached an agreement on the following issues:
- The plan for the so called “red loans”
- Continue the privatization of state property