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Greek Govt Expects 3.7 Bln Euros in Revenues from Reforms Package

Greek Reforms PackageThe Greek government expects 3.7 billion euros of revenues from the introduction of a reforms package currently discussed with the country’s creditors in the Brussels Group.
The reforms include, among others, the introduction of taxes on Greek citizens’ deposits abroad – with an expected revenue of around 750 million euros – more favorable terms for repaying overdue debt to the state, combating smuggling and licensing of television stations. The government also envisages revenues of up to 1.5 billion euros from privatizations at Piraeus port, regional airports and horse betting licenses.
The primary surplus is expected to surpass 1.2% of GDP this year, to around 1.5%, with the introduction of a reforms package with a fiscal impact of 3.7 billion euros. The biggest part of these revenues will come from controls on deposits abroad (725 million), combating tax evasion on VAT (350 million), licensing of TV stations (350 million), more favorable terms of repaying overdue debts to the state (600 million), simplification of income tax code (300 million), a lottery on retail receipts (270 million), combatting smuggling on cigarettes and fuel (250 million) and new tenders for e-gaming (200 million).
GDP growth is projected at 1.4% this year, down from an initial estimate of 2.9%, and to 2.9% in 2016. Unemployment rate is expected at 23.4% this year, instead of an earlier estimate of 22.6%, falling to 21.1% in 2016. Inflation rate will remain in negative territory this year (-0.5%), returning to positive ground (-0.6%) in 2016. These estimates are based on the assumption that the government will postpone a zero deficit clause for supplementary pensions and will re-introduce a 13th pension payment for low pensioners. The postponement of a zero deficit clause will cost 326 million euros.
In terms of privatizations, the proceeds target was revised down to 1.5 billion euros this year, from 2.2 billion initially, reflecting the sale of Piraeus port, horse-betting licensing and a tender on regional airports.
The program envisages measures to strengthen the autonomy of Public Revenue General Secretariat, abolishing all early retirement schemes, modernizing revenue collection code, streamlining transactions between state and taxpayers, introducing an organic law on budget, promoting out-of-court compromise deals on non-performing loans, a more efficient court legislation and finally improving the credibility and independence of the Hellenic Statistical Authority (ELSTAT).
The government will also examine previous reform pledges covering public administration, bankruptcy law, professional and service markets. It also recommends the creation of an investment program in cooperation with the European Investment Bank (EIB) and managing the non-performing loans problem by setting up a bad bank, using the 10.9 billion euros cushion of the Hellenic Financial Stability Fund (HFSF).
(source: ana-mpa)

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