The letter from Athens to Brussels tries to keep some promises of the election campaign that gave the victory to SYRIZA, while yields elsewhere. Initial analysis greet the effort to make reforms, to fight corruption and set privileges. Changes in collective bargaining and privatization may be difficult for the more radical wing of the ruling party. Initial reactions show that there was an effort to reconcile the internal and external pressures which governs the executive led by Alexis Tsipras.
The list of proposals that the Greek finance minister sent to Brussel s highlights a number of measures in respect of tax, from the fight against tax evasion to the modernization and reform of the tax code and international cooperation to find great trails to the tax authorities.
It also promises better management of public finances, with more control over spending, and more independence of the supervisory bodies of political control – even last year the inspector-general of taxes resigned after intense political pressure not to investigate certain people.
At the same time you want to decriminalize debtors to the tax authorities and with reduced unevenness in income, the Greek Government wants to strengthen the ability to collect taxes owed (estimates for five to six billion lost each year because of tax evasion).
The fight against corruption is a major executive betting Tsipras, with a national plan and a minister of the folder. The money that hope to raise with the fight against smuggling of fuel and tobacco will also be one of the sources of revenue.
The Government also promises to make an assessment of the costs of all ministries and rationalize that are not wages or pensions (which correspond, note the letter, 56% of total spending), and cross-reference information across multiple systems to find potential false beneficiaries. As for social security, is promised to simplify the system to eliminate failures and incentives that contribute to the excessive rise of early retirement (particularly in the banking and public sectors, according to the Greek proposal).
In relation to the system health, the government wants to keep the promise of universal health care (Greece has a mixed system, with insurance and employer contributions, and who is unemployed is quickly without access to the national health service), promising to later proposals specific, outlined in collaboration with international institutions such as the OECD.
Continue to privatize
In terms of concessions to creditors, the continuation of the ongoing privatization seems to be one of the most important, while the level of labor law there are two proposals for change that are made with considerable caution. On the one hand, it remains the intention of increasing the minimum wage, but gradually and provided that “safeguarding the competitiveness and employment prospects.” Qualque decision will be taken in conjunction with partners. On the other hand, the Government moves to what it says is “a new approach and ‘smart’ to collective bargaining to maintain a balance between flexibility and fairness”. Changes in collective bargaining imposed in recent years by the troika and the cut in the minimum wage were two of the major criticisms made by SYRIZA in terms of labor law.
Another important area is the measures taken to improve the situation Greeks who feel great difficulty in paying their debts to the tax authorities, social security and banking. The Government announces that it intends to create progressive payment schemes of tax debts and advances to state aid to those who can not pay their loans for home purchase and the inability of banks to stay with the only residence of families with low income levels . The letter assured, however, that while it protects those who are unable to pay their debts, heavily penalizes those who do not pay for strategic considerations.
The Executive Tsipras also proposes save by reducing the number of ministers from 16 to ten advisers in government, and political benefits (eg cars and expenses of members), and the payment of licenses by public television stations.
As one of the main promises of the Government, the resolution of what it considers to be “humanitarian crisis” in the country, the letter is vague, promising very targeted measures to those who can not afford basic needs such as food, shelter, care health and energy, and non-monetary measures, such as food stamps – committing to this effort to be coordinated with other reforms (with an identity card that serves to access to health care and food stamps for example) and do not contribute to the increase in expenditure.
The first reaction came from the Austrian Minister of Finance stated that after that you have read, provides a positive outcome of the talks on the Greek case.
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