Greek Prime Minister Alexis Tsipras made a new offer on a reforms package to foreign creditors on Sunday, for a "mutually beneficial agreement," that would "not just postpone tackling the problem"according to a statement released by the Greek government.
The new plan includes:
[1] Elimination of early retirement options as of next year (that can produce savings of 200 million euros).
[2] An increase on tax surcharges that middle- and high-income earners pay.
[3] A levy on companies with annual net income of more than 500,000 euros.
[4] Deep cuts in defense spending (that can produce savings of 150-180 million euros).
[5] New VAT rates of 6.5%, 13% and 23% with the possibility of increasing the VAT rate on restaurants, cafeterias and bars to 23%.
[6] The solidarity tax on incomes above 30,000 euros will be left in place without the 30% reduction that the previous coalition had introduced. Other taxes may also be introduced.
[7] an increase of 4% to 5% of the health care contribution levy on primary as well as supplementary pensions. In this way primary pensions will be reduced by 1% and supplementary pensions by 5% raising a projected 720 million euros per year.
The heads of the 19 eurozone countries will hold an emergency summit on the crisis in Brussels on Monday under pressure to prevent Greece from defaulting on its debt with a June 30 payment deadline fast approaching.
Athens announced a frenzied round of meetings ahead of a summit, with Tsipras also scheduled to meet the leaders of its IMF, EU and ECB creditors on Monday before the summit. Deputy PM Yannis Dragasakis and Minister of Finance Yanis Varoufakis will accompany Prime Minister Tsipras to Brussels for talks with European officials.
The Greek government has repeatedly pledged to scrap an extension of rescue package and an investment program for kick-starting the devastated Greek economy funded by the Juncker Plan, the European Investment Bank. Proposals from Athens have previously been knocked back by their creditors who have insisted on their own mixture of cuts and reforms, which the Greek government has dismissed as "unacceptable”.