The critical omnibus reform bill that needed to release a delayed €10.5 billion installment from Greece’s international lenders was approved by the Greek parliament in the early morning hours of Monday.
The bill corrects many injustices that used to exist in property and vehicle taxation, as well as in the Greek VAT and in the fines imposed by Greek tax offices. New provisions on milk and bread are said to create a better purchase environment for consumers, while the unemployment benefits and layoff compensations for employees of the Greek public sector create an unprecedented first.
Up to €525 million will be distributed as social benefits among uniformed officers, financially weak, homeless, uninsured and long-term unemployed people, before or after May’s elections. The lump sum will be exempt from taxation.
Lower fines up to 80 percent
The onerous fines which had roused a storm of protests from both the market and accountants were finally lowered by 80 percent. Fines of €1,000 and €2,500 are now being lowered to €250 and €500, with the maximum fine of €30,000 per tax audit. Another provision foresees imprisonment up to three years for keeping duplicate books and other major tax infringements.
Recapitalization on market terms
The conditions laid down in the omnibus bill on the new deal on the Greek banks feature consolidation of the banks’ portfolios through private capital, share capital increases and partial haircut of unsecured bonds and of distressed loans. An apparent risk to deposits is not found.
The Hellenic Financial Stability Fund (HFSF) is set to play a key role in the new deal which will fix the price of new shares and banks’ convertible bonds. The share capital increase will be covered primarily by individuals, while the HFSF will be participating only if shares remain unsold, although firstly converting the subordinated debt instruments into shares, thus incorporating the EU Directive on the bail-in.
Stop to foreclosures and seizures
A hold is being put on the foreclosures of real estate and seizures of mobile assets for a debt of up to €500, while the limit for seizing salaries and pension is raised from €1,000 to €1,500.
Layoffs in public sector
Public sector employees who are laid off will receive compensation up to a maximum of €15,000, which is taxable.
Drugs and pharmacies
The price tag of over-the-counter drugs is released, thus the elimination of the guaranteed profit margin of Greek pharmacists. The opening hours of the pharmacies are also released. Pharmacists can establish business within other stores, while vitamins and supplements are allowed to be sold over the internet.
The provisions contained in the new bill are due to alter the Greek market drastically and the daily routine of all Greek people.