Draft bill of prior actions on new debt deal tabled in Greek parliament

A draft bill containing prior actions Greece needs to take under the debt deal reached in Brussels on Monday has been tabled in the Greek parliament, according to an official announcement by the Finance Ministry on Tuesday.

The bill which includes a first set of mainly taxation and pension system reforms was scheduled to be put to vote on Wednesday evening.

The tough prerequisites lenders have set in return for the release of vital international funding shortly to keep Greece afloat and within the euro zone under the third bailout, have been strongly criticized by a group of cabinet ministers and MPs of the ruling Radical Left SYRIZA party and the junior coalition partner of the Right-wing Independent Greeks.

Despite scenarios of a looming rift within SYRIZA and the government, the draft bill was expected to pass the assembly with the support of the pro-euro opposition parties.

The first chapter of the draft legislation ratifies Monday's euro zone final statement on the Greek issue, the second chapter includes taxation reforms and the third social reforms, including measures to discourage early retirement.

Amongst the policies contained is a VAT reform that foresees three different rates of 6 percent for medicine, books and theater tickets to 23 percent for processed food products and transportation among other services. A 13 percent rate is applied to fresh food products, energy, water and hotel accommodation.

Regarding other measures, the draft bill also foresees an increase on the corporate tax from 26 percent to 28 percent, on the luxury tax from 10 percent to 13 percent for vehicles with an engine of more than 2,500 cc, pools, aircraft and boats with a length of more than five meters, as well as the increase of the tax rate of farmers from 13 percent to 26 percent.

In regard to pension reform, gradually from July 1, 2015, to 2023 all early retirements, with the exception of "heavy professions" and mothers with incapacitated children are abolished. Greeks will from now on retire either at 67 years or at 62, if they have completed 40 years of employment.

According to early estimates by financial analysts the measures contained in the bill will raise further 4 billion euros from taxation and will save one billion euros from the pension reforms on an annual basis.

Following the ratification of the bill by the Greek parliament the Leftist Prime Minister Alexis Tsipras was expected to proceed to a cabinet reshuffle, according to government sources, most likely on Thursday.

At least two cabinet ministers who publicly rejected the debt deal as "humiliating for Greek people" are expected to be replaced.

The same sources told Greek national news agency AMNA that the Premier did not intend to seek other coalition partners to form a national unity government or leave the country's governance to an administration of technocrats, as local media reports have suggested. Endit