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The final proposals of Greece to its creditors

The spectrum of the “Grexit” would move away it? Thursday evening, two hours before the ultimatum, Greece has undertaken to include most of the proposals of creditors to convince them to release their financial aid and avoid an exit from the euro zone.

Proposals made in extremis

The new reform proposals promised by Athens will be presented this Friday in the Greek Parliament, to allow or not the government to negotiate the reform package. These will then be evaluated by the countries of the euro area before a European special summit on Sunday on the fate of the country.

Proposals submitted Thursday night approximate the latest proposals of creditors of 26 June, the government initially rejected while announcing the holding of a referendum

The main points of the Greek plan:

Increase of VAT

VAT rate, the bone of contention between Athens and its creditors, is set at 23%, also including restoration (so far it was 13%), as desired by the creditors. For basic products, electricity and hotels, VAT remains at 13% for medicines, books and 6% theater tickets.

Removing tax benefits islands

The Government proposes the abolition of tax benefits for the islands (the 30% reduction VAT applied for several years), starting with the richest and tourist islands. This removal will begin in October and will be made gradually and be completed by the end of 2016.

Pension reform

The starting age for a full pension is fixed at 67 years, or 62 years with 40 years of work, and will be raised gradually by 2022.

Fight against tax evasion

The Government proposes a series of measures against tax evasion and the reorganization of the system raising taxes.

budgetary objectives

Initially Athens was aligned with the proposals of creditors to achieve a primary budget surplus (excluding debt service) from 1% in 2015, 2% in 2016 and 3% in 2017 but Thursday night the government indicated that these objectives should be re-examined because the economic situation has worsened in recent days, particularly after the imposition of capital controls and the closing of banks.

public debt

The Greek proposals also provide “the regulation of public debt”, 180% of GDP currently, according to a government source who did not give more details on this thorny subject that the majority of countries in the euro zone do not want to hear, especially Germany and the northern countries.

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