We publish the latest and possibly the final proposal to the EC, ECB and IMF by the Greek Government for debt reduction and compare it with the (pre-election) Debt Negotiation and Social Reconstruction Plan by Syriza. (Here is the proposal in Greek.)
A. The latest proposal by Greek Government to EC, ECB & IMF:
1. 2015 supplementary budget and 2016-19 MTFS1
Adopt effective as of July 1, 2015 a supplementary 2015 budget and a 2016–19 medium-term fiscal strategy, supported by a sizable and credible package of measures. The new fiscal path is premised on a primary surplus target of (1, 2, 3), and 3.5 percent of GDP in 2015, 2016, 2017 and 2018. The package includes VAT reforms (¶2), other tax policy measures (¶3), pension reforms (¶4), public administration reforms (¶5), reforms addressing shortfalls in tax collection enforcement (¶6), and other parametric measures as specified below.
2. VAT reform
Adopt legislation to reform the VAT system that will be effective as of July 1, 2015. The reform will target a net revenue gain of 1 percent of GDP on an annual basis from parametric changes. The new VAT system will: (i) unify the rates at a standard 23 percent rate, which will include restaurants and catering, and a reduced 13 percent rate for basic food, energy, hotels, and water (excluding sewage), and a super-reduced rate of 6 percent for pharmaceuticals, books, and theater; (ii) streamline exemptions to broaden the base and raise the tax on insurance; and (iii) Eliminate discounts on islands, starting with the islands with higher incomes and which are the most popular tourist destinations, except the most remote ones. This will be completed by end-2016, as appropriate and targeted fiscally neutral measures to compensate those inhabitants that are most in need are determined. The new VAT rates on hotels and islands will be implemented from October 2015.
The increase of the VAT rate described above may be reviewed at the end of 2016, provided that equivalent additional revenues are collected through measures taken against tax evasion and to improve collectability of VAT. Any decision to review and revise shall take place in consultation with the institutions.
3. Fiscal structural measures
Adopt legislation to:
· close possibilities for income tax avoidance (e.g., tighten the definition of farmers), take measures to increase the corporate income tax in 2015 and require 100 percent advance payments for corporate income and gradually for individual business income tax by 2017; phase out the preferential tax treatment of farmers in the income tax code by 2017; raise the solidarity surcharge;
· abolish subsidies for excise on diesel oil for farmers and better target eligibility to halve heating oil subsidies expenditure in the budget 2016;
· in view of any revision of the zonal property values, adjust the property tax rates if necessary to safeguard the 2015 and 2016 property tax revenues at €2.65 billion and adjust the alternative minimum personal income taxation.
· eliminate the cross-border withholding tax introduced by the installments act (law XXXX/2015) and reverse the recent amendments to the ITC in the public administration act (law XXXX/2015), including the special treatment of agricultural income.
· adopt outstanding reforms on the codes on income tax, and tax procedures: introduce a new Criminal Law on Tax Evasion and Fraud to amend the Special Penal Law 2523/1997 and any other relevant legislation, and replace Article 55, ¶s 1 and 2, of the TPC, with a view, inter alia, to modernize and broaden the definition of tax fraud and evasion to all taxes; abolish all Code of Book and Records fines, including those levied under law 2523/1997 develop the tax framework for collective investment vehicles and their participants consistently with the ITC and in line with best practices in the EU.
· adopt legislation to upgrade the organic budget law to: (i) introduce a framework for independent agencies; (ii) phase out ex-ante audits of the Hellenic Court of Auditors and account officers (ypologos); (iii) give GDFSs exclusive financial service capacity and GAO powers to oversee public sector finances; and (iv) phase out fiscal audit offices by January 2017.
· increase the rate of the tonnage tax and phase out special tax treatments of the shipping industry.
By September 2015, (i) simplify the personal income tax credit schedule; (ii) re-design and integrate into the ITC the solidarity surcharge for income of 2016 to more effectively achieve progressivity in the income tax system; (iii) issue a circular on fines to ensure the comprehensive and consistent application of the TPC; (iv) and other remaining reforms as specified in ¶9 of the IMF Country Report No. 14/151.
On health care, effective as of July 1, 2015, (i) re-establish full INN prescription, without exceptions, (ii) reduce as a first step the price of all off-patent drugs to 50 percent and all generics to 32.5 percent of the patent price, by repealing the grandfathering clause for medicines already in the market in 2012, and (iii)) review and limit the prices of diagnostic tests to bring structural spending in line with claw back targets; and (iv) collect in the full the 2014 clawback for private clinics, diagnostics and pharmaceuticals, and extend their 2015 clawback ceilings to 2016.
Launch the Social Welfare Review under the agreed terms of reference with the technical assistance of the World Bank to target savings of ½ percent of GDP which can help finance a fiscally neutral gradual roll-out of the GMI in January 2016.
Adopt legislation to:
· reduce the expenditure ceiling for military spending by €100 million in 2015 and by €200 million in 2016 with a targeted set of actions, including a reduction in headcount and procurement;
· introduce reform of the income tax code, [inter alia covering capital taxation], investment vehicles, farmers and the self- employed, etc.;
· raise the corporate tax rate from 26% to 28%;
· introduce tax on television advertisements;
· announce international public tender for the acquisition of television licenses and usage related fees of relevant frequencies; and
· extend implementation of luxury tax on recreational vessels in excess of 5 meters and increase the rate from 10% to 13%, coming into effect from the collection of 2014 income taxes and beyond;
· extend Gross Gaming Revenues (GGR) taxation of 30% on VLT games expected to be installed at second half of 2015 and 2016;
· generate revenues through the issuance of 4G and 5G licenses.
We will consider some compensating measures, in case of fiscal shortfalls: (i) Increase the tax rate to income for rents, for annual incomes below €12,000 to 15% (from 11%) with an additional revenue of €160 million and for annual incomes above €12,000 to 35% (from 33%) with an additional revenue of €40 million; (ii) the corporate income tax will increase by an additional percentage point (i.e. from 28% to 29%) that will result in additional revenues of €130 million.
4. Pension reform
The Authorities recognise that the pension system is unsustainable and needs fundamental reforms. This is why they will implement in full the 2010 pension reform law (3863/2010), and implement in full or replace/adjust the sustainability factors for supplementary and lump-sum pensions from the 2012 reform as a part of the new pension reform in October 2015 to achieve equivalent savings and take further steps to improve the pension system.
Effective from July 1, 2015 the authorities will phase-in reforms that would deliver estimated permanent savings of ¼-½ percent of GDP in 2015 and 1 percent of GDP on a full year basis in 2016 and thereafter by adopting legislation to:
· create strong disincentives to early retirement, including the adjustment of early retirement penalties, and through a gradual elimination of grandfathering to statutory retirement age and early retirement pathways progressively adapting to the limit of statutory retirement age of 67 years, or 62 and 40 years of contributions by 2022, applicable for all those retiring (except arduous professions, and mothers with children with disability) with immediate application;
· adopt legislation so that withdrawals from the Social Insurance Fund will incur an annual penalty, for those affected by the extension of the retirement age period, equivalent to 10 percent on top of the current penalty of 6 percent.
· integrate into ETEA all supplementary pension funds and ensure that, starting January 1, 2015, all supplementary pension funds are only financed by own contributions;
· better target social pensions by increasing OGA uninsured pension;
· Gradually phase out the solidarity grant (EKAS) for all pensioners by end-December 2019. This shall be legislated immediately and shall start as regards the top 20% of beneficiaries in March 2016 with the modalities of the phase out to be agreed with the institutions;
· freeze monthly guaranteed contributory pension limits in nominal terms until 2021;
· provide to people retiring after 30 June 2015 the basic, guaranteed contributory, and means tested pensions only at the attainment of the statutory normal retirement age of currently 67 years;
· increase the health contributions for pensioners from 4% to 6% on average and extend it to supplementary pensions;
· phase out all state-financed exemptions and harmonize contribution rules for all pension funds with the structure of contributions to IKA from 1 July 2015;
Moreover, in order to restore the sustainability of the pension system, the authorities will by 31 October 2015, legislate further reforms to take effect from 1 January 2016; (i) specific design and parametric improvements to establish a closer link between contributions and benefits; (ii) broaden and modernize the contribution and pension base for all self-employed, including by switching from notional to actual income, subject to minimum required contribution rules; (iii) revise and rationalize all different systems of basic, guaranteed contributory and means tested pension components, taking into account incentives to work and contribute; (iv) the main elements of a comprehensive SSFs consolidation, including any remaining harmonization of contribution and benefit payment rules and procedures across all funds; (v) abolish all nuisance charges financing pensions and offset by reducing benefits or increasing contributions in specific funds to take effect from 31 October 2015; and (vi) harmonize pension benefit rules of the agricultural fund (OGA) with the rest of the pension system in a pro rata manner, unless OGA is merged into other funds. The consolidation of social insurance funds will take place by end 2017. In 2015, the process will be activated through legislation to consolidate the social insurance funds under a single entity and the operational consolidation will have been completed by 31 December 2016. Further reductions in the operating costs and a more effective management of fund resources including improved balancing of needs between better-off and poorer-off funds will be actively encouraged.
The authorities will adopt legislation to fully offset the fiscal effects of the implementation of court rulings on the 2012 pension reform.
In parallel to the reform of the pension system, a Social Welfare Review will be carried out to ensure fairness of the various reforms.
The institutions are prepared to take into account other parametric measures within the pension system of equivalent effect to replace some of the measures mentioned above, taking into account their impact on growth, and provided that such measures are presented to the institutions during the design phase and are sufficiently concrete and quantifiable, and in the absence of this the default option is what is specified above.
5. Public Administration, Justice and Anti Corruption
Adopt legislation to:
· reform the unified wage grid, effective 1 January, 2016, setting the key parameters in a fiscally neutral manner and consistent with the agreed wage bill targets and with comprehensive application across the public sector, including decompressing the wage distribution across the wage spectrumin connection with the skill, performance and responsibility of staff. (The authorities will also adopt legislation to rationalise the specialised wage grids, by end-November 2015);
· align non-wage benefits such as leave arrangements, per diems, travel allowances and perks, with best practices in the EU, effective 1 January 2016;
· establish within the new MTFS ceilings for the wage bill and the level of public employment consistent with achieving the fiscal targets and ensuring a declining path of the wage bill relative to GDP until 2019;
· hire managers and assess performance of all employees (with the aim to complete the hiring of new managers by 31 December 2015 subsequent to a review process)
· introduce a new permanent mobility scheme applied by Q4 2015. The scheme will promote the use of job description and will be linked with an online database that will include all current vacancies. Final decision on employee mobility will be taken by each service concerned. This will rationalize the allocation of resources as well as the staffing across the General Government.
· reform the Civil Procedure Code, in line with previous agreements; introduce measures to reduce the backlog of cases in administrative courts; work closely with European institutions and technical assistance on e-justice, mediation and judicial statistics
· strengthen the governance of ELSTAT. It shall cover (i) the role and structure of the Advisory bodies of the Hellenic Statistical System, including the recasting of the Council of ELSS to an advisory Committee of the ELSS, and the role of the Good Practice Advisory Committee (GPAC); (ii) the recruitment procedure for the President of ELSTAT, to ensure that a President of the highest professional calibre is recruited, following transparent procedures and selection criteria; (iii) the involvement of ELSTAT as appropriate in any legislative or other legal proposal pertaining to any statistical matter; (iv) other issues that impact the independence of ELSTAT, including financial autonomy, the empowerment of ELSTAT to reallocate existing permanent posts and to hire staff where it is needed and to hire specialised scientific personnel, and the classification of the institution as a fiscal policy body in the recent law 4270/2014; role and powers of Bank of Greece in statistics in line with European legislation.
· Publish a revised Strategic Plan against Corruption by 31 July 2015. Amend and implement the legal framework for the declaration of assets and financing of the political parties and adopt legislation insulating financial crime and anti-corruption investigations from political intervention in individual cases.
Moreover, in collaboration with the OECD, the Authorities will:
· Strengthen controls in public entities and especially SOEs. Empower the Line Ministries to perform robust audit and control inspections to supervised entities including SOEs.
· Strengthen controls and internal audit processes in high spending Local Government Institutions and their supervised legal entities.
· Strengthen controls in public and private investment cases funded either by national or co-funded by other sources, public works and public procurement (e.g. in health sector, SDIT).
· Strengthen transparency and control processes and skills in tax and customs authorities.
· Assess major risks in the public procurement cycle, taking in consideration the recent developments (Central Purchasing and e-Procurement: KHMDHS and ESHDHS) and the need to have a clear governance framework. Develop strategy according to the assessment(Q4 2015)
· Implement strategy to mitigate public procurement risks.(Q1 2016)
· Assess 2 specific sectors, Health and Public Works in order to understand the existing constrains related to corruption and waste risks and propose measures to address them. Develop and implement strategy. (Q4 2015).
6. Tax administration
Take the following actions to:
· Adopt legislation to establish an autonomous revenue agency, that specifies: (i) the agency’s legal form, organization, status, and scope; (ii) the powers and functions of the CEO and the independent Board of Governors; (iii) the relationship to the Minister of Finance and other government entities; (iv) the agency’s human resource flexibility and relationship to the civil service; (v) budget autonomy, with own GDFS and a new funding formula to align incentives with revenue collection and guarantee budget predictability and flexibility; (vi) reporting to the government and parliament; and (vii) the immediate transfer of all tax- and customs-related capacities and duties and all tax- and customs-related staff in SDOE and other entities to the agency.
· on garnishments, adopt legislation to eliminate the 25 percent ceiling on wages and pensions and lower all thresholds of €1,500 while ensuring in all cases reasonable living conditions; accelerate procurement of IT infrastructure to automatize e-garnishment; improve tax debt write-off rules; remove tax officers’ personal liabilities for not pursuing old debt; remove restrictions on conducting audits of tax returns from 2012 subject to the external tax certificate scheme; and enforce if legally possible upfront payment collection in tax disputes.
· amend (i) the 2014–15 tax and SSC debt instalment schemes to exclude those who fail to pay current obligations and introduce a requirement for the tax and social security administrations to shorten the duration for those with the capacity to pay earlier and introduce market-based interest rates; the LDU and KEAO will assess by September 2015 the large debtors with tax and SSC debt exceeding €1 million (e.g. verify their capacity to pay and take corrective action) and (ii) the basic instalment scheme/TPC to adjust the market-based interest rates and suspend until end-2017 third-party verification and bank guarantee requirements.
· adopt legislation to accelerate de-registration procedures and limit VAT re-registration to protect VAT revenues and accelerate procurement of network analysis software; and provide the Presidential Decree needed for the significantly strengthening the reorganisation of the VAT enforcement section in order to strengthen VAT enforcement and combat VAT carousel fraud. The authorities will submit an application to the EU VAT Committee and prepare an assessment of the implication of an increase in the VAT threshold to €25.000.
· combat fuel smuggling, via legislative measures for locating storage tanks (fixed or mobile);
· Produce a comprehensive plan with technical assistance for combating tax evasion which includes (i) identification of undeclared deposits by checking bank transactions in banking institutions in Greece or abroad, (ii) introduction of a voluntary disclosure program with appropriate sanctions, incentives and verification procedures, consistent with international best practice, and without any amnesty provisions (iii) request from EU member states to provide data on asset ownership and acquisition by Greek citizens, (iv) renew the request for technical assistance in tax administration and make full use of the resource in capacity building, (v) establish a wealth registry to improve monitoring.
· develop a costed plan for the promotion of the use of electronic payments, making use of the EU Structural and Investment Fund;
· Create a time series database to monitor the balance sheets of parent-subsisdiary companies to improve risk analysis criteria for transfer pricing.
7. Financial sector
Adopt: (i) amendments to the corporate and household insolvency laws including to cover all debtors and bring the corporate insolvency law in line with the OCW law; (ii) amendments to the household insolvency law to introduce a mechanism to separate strategic defaulters from good faith debtors as well as simplify and strengthen the procedures and introduce measures to address the large backlog of cases; (iii) amendments to improve immediately the judicial framework for corporate and household insolvency matters; (iv) legislation to establish a regulated profession of insolvency administrators, not restricted to any specific profession and in line with good cross-country experience; (v) a comprehensive strategy for the financial system: this strategy will build on the strategy document from 2013, taking into account the new environment and conditions of the financial system and with a view of returning the banks in private ownership by attracting international strategic investors and to achieve a sustainable funding model over the medium term; and (vi) a holistic NPL resolution strategy, prepared with the help of a strategic consultant.
8. Labour market
Launch a consultation process to review the whole range of existing labour market arrangements, taking into account best practices elsewhere in Europe. Further input to the consultation process described above will be provided by international organisations, including the ILO. The organization and timelines shall be drawn up in consultation with the institutions. In this context, legislation on a new system of collective bargaining should be ready by Q4 2015. The authorities will take actions to fight undeclared work in order to strengthen the competitiveness of legal companies and protect workers as well as tax and social security revenues.
9. Product market
Adopt legislation to:
· implement all pending recommendations of the OECD competition toolkit I, except OTC pharmaceutical products, starting with: tourist buses, truck licenses, code of conduct for traditional foodstuff, eurocodes on building materials, and all the OECD toolkit II recommendations on beverages and petroleum products;
· In order to foster competition and increase consumer welfare immediately launch a new competition assessment, in collaboration and with the technical support of the OECD, on wholesale trade, construction, e-commerce and media. The assessment will be concluded by Q1 2016.The recommendations will be adopted by Q2 2016.
· open the restricted professions of engineers, notaries, actuaries, and bailiffs and liberalize the market for tourist rentals ;
· eliminate non-reciprocal nuisance charges and align the reciprocal nuisance charges to the services provided;
· reduce red tape, including on horizontal licensing requirements of investments and on low-risk activities as recommended by the World Bank, and administrative burden of companies based on the OECD recommendations, and (ii) establish a committee for the inter-ministerial preparation of legislation. Technical assistance of the World Bank will be sought to implement the easing of licensing requirements.
· design electronic one-stop shops for businesses through analysing information obligations businesses have to comply with, structuring them accordingly and helping to design a project on developing the necessary ICT tools and infrastructure (Q3 2015). Setting up the institutional & co-ordination structure, identification of the business life events to be included, identification and mapping of information obligations & administrative procedures and training of officials (Q4 2015). Launch (Q1 2016)
· adopt the reform of the gas market and its specific roadmap, and implementation should follow suit.
· take irreversible steps (including announcement of date for submission of binding offers) to privatize the electricity transmission company, ADMIE, or provide by October 2015 an alternative scheme, with equivalent results in terms of competition, in line with the best European practices to provide full ownership unbundling from PPC, while ensuring independence.
On electricity markets, the authorities will reform the capacity payments system and other electricity market rules to avoid that some plants are forced to operate below their variable cost, and to prevent the netting of the arrears between PPC and market operator; set PPC tariffs based on costs, including replacement of the 20% discount for HV users with cost based tariffs; and notify NOME products to the European Commission. The authorities will also continue the implementation of the roadmap to the EU target model prepare a new framework for the support of renewable energies and for the implementation of energy efficiency and review energy taxation; the authorities will strengthen the electricity regulator’s financial and operational independence;
· The Board of Directors of the Hellenic Republic Asset Development Fund will approve its Asset Development Plan which will include for privatisation all the assets under HRDAF as of 31/12/2014; and the Cabinet will endorse the plan.
· To facilitate the completion of the tenders, the authorities will complete all government pending actions including those needed for the regional airports, TRAINOSE, Egnatia, the ports of Pireaus and Thessaloniki and Hellinikon (precise list in Technical Memorandum). This list of actions is updated regularly and the Government will ensure that all pending actions are timely implemented.
· The government and HRADF will announce binding bid dates for Piraeus and Thessaloniki ports of no later than end-October 2015, and for TRAINOSE ROSCO, with no material changes in the terms of the tenders.
· The government will transfer the state’s shares in OTE to the HRADF.
· Take irreversible steps for the sale of the regional airports at the current terms with the winning bidder already selected.
The fiscal path to reach the medium term primary surplus target of 3.5% will be discussed with the institutions, in light of recent economic developments.
B. The Syriza Debt Negotiation and Social Reconstruction plan (published prior to election)
The Context of Negotiation:
- Write-off the greater part of public debt’s nominal value so that it becomes sustainable in the context of a «European Debt Conference». It happened for Germany in 1953. It can also happen for the South of Europe and Greece.
- Include a «growth clause» in the repayment of the remaining part so that it is growth-financed and not budget-financed.
- Include a significant grace period («moratorium») in debt servicing to save funds for growth.
- Exclude public investment from the restrictions of the Stability and Growth Pact.
- A «European New Deal» of public investment financed by the European Investment Bank.
- Quantitative easing by the European Central Bank with direct purchases of sovereign bonds.
- Finally, we declare once again that the issue of the Nazi Occupation forced loan from the Bank of Greece is open for us. Our partners know it. It will become the country’s official position from our first days in power.
On the basis of this plan, we will fight and secure a socially viable solution to Greece’s debt problem so that our country is able to pay off the remaining debt from the creation of new wealth and not from primary surpluses, which deprive society of income. With that plan, we will lead with security the country to recovery and productive reconstruction by:
- Immediately increasing public investment by at least €4 billion.
- Gradually reversing all the Memorandum injustices.
- Gradually restoring salaries and pensions so as to increase consumption and demand.
- Providing small and medium-sized enterprises with incentives for employment, and subsidizing the energy cost of industry in exchange for an employment and environmental clause.
- Investing in knowledge, research, and new technology in order to have young scientists, who have been massively emigrating over the last years, back home.
- Rebuilding the welfare state, restoring the rule of law and creating a meritocratic state.
We are ready to negotiate and we are working towards building the broadest possible alliances in Europe. The present Samaras government is once again ready to accept the decisions of the creditors. The only alliance which it cares to build is with the German government.
This is our difference and this is, at the end, the dilemma:
- European negotiation by a SYRIZA government, or acceptance of the creditors’ terms on Greece by the Samaras government.
- Negotiation or non-negotiation.
- Growth or austerity.
- SYRIZA or New Democracy.
What will happen though until the negotiation is over?
We assume responsibility and are accordingly committed to the Greek people for a National Reconstruction Plan that will replace the Memorandum as early as our first days in power, before and regardless of the negotiation outcome. The National Reconstruction Plan focuses on four major pillars to reverse the social and economic disintegration, to reconstruct the economy and exit from the crisis.
THE FOUR PILLARS OF THE NATIONAL RECONSTRUCTION PLAN
1. Confronting the humanitarian crisis
2. Restarting the economy and promoting tax justice
3. Regaining employment
4. Transforming the political system to deepen democracy
1st PILLAR: Confronting the humanitarian crisis
Total estimated cost: €1,882 billion.
Our program to immediately confront the humanitarian crisis, with an estimated cost around €2 billion, amounts to a comprehensive grid of emergency interventions, so as to raise a shield of protection for the most vulnerable social strata.
- Free electricity to 300.000 households currently under the poverty line up to 300 kWh per month per family; that is, 3.600 kWh per year.Total cost: €59,4 million.
- Programme of meal subsidies to 300.000 families without income. The implementation will take place via a public agency of coordination, in cooperation with the local authorities, the Church and solidarity organizations. Total cost: €756 million.
- Programme of housing guarantee. The target is the provision of initially 30.000 apartments (30, 50, and 70 m²), by subsidizing rent at €3 per m². Total cost: €54 million.
- Restitution of the Christmas bonus, as 13th pension, to 1.262.920 pensioners with a pension up to €700. Total cost: €543,06 million.
Free medical and pharmaceutical care for the uninsured unemployed. Total cost: €350 million.
- Special public transport card for the long-term unemployed and those who are under the poverty line. Total cost: €120 million.
- Repeal of the leveling of the special consumption tax on heating and automotive diesel. Bringing the starting price of heating fuel for households back to €0,90 per lt, instead of the current €1,20 per lt. Benefit is expected.
2nd PILLAR: Restarting the economy and promoting tax justice
Total estimated cost: €6,5 billion. Total estimated benefit: €3,0 billion.
The second pillar is centered on measures to restart the economy. Priority is given to alleviating tax suppression on the real economy, relieving citizens of financial burdens, injecting liquidity and enhancing demand. Excessive taxation on the middle class as well as on those who do not tax-evade has entrapped a great part of citizens in a situation which directly threatens their employment status, their private property, no matter how small, and even their physical existence, as proved by the unprecedented number in suicides.
- Settlement of financial obligations to the state and social security funds in 84 installments. Estimated benefit: €3 billion.
- The revenue which we expect to collect on an annual basis (between 5% and 15% of the total owed) will be facilitated by the following measures:
- The immediate cease of prosecution as well as of confiscation of bank accounts, primary residence, salaries, etc, and the issuance of tax clearance certificate to all those included in the settlement process.
- A twelve-month suspension of prosecution and enforcement measures against debtors with an established zero income, included in the settlement process.
- Repeal of the anti-constitutional treatment of outstanding financial obligations to the state as offence in the act (in flagrante delicto).
Abolition of the mandatory 50% down payment of the outstanding debt as a prerequisite to seek a court hearing. The down payment will be decided by a judge. It will be around 10%-20%, according to the financial circumstances of the debtor.
- Immediate abolition of the current unified property tax (ENFIA). Introduction of a tax on large property. Immediate downward adjustment of property zone rates per m². Estimated cost: €2 billion. That tax will be progressive with a high tax-free threshold. With the exception of luxurious homes, it will not apply on primary residence. In addition, it will not concern small and medium property.
- Restitution of the €12000 annual income tax threshold. Increase in the number of tax brackets to ensure progressive taxation. Estimated cost: €1.5 billion.
- Personal debt relief by restructuring non-performing loans («red loans») by individuals and enterprises. This new relief legislation will include: the case-by-case partial write-off of debt incurred by people who now are under the poverty line, as well as the general principle of readjusting outstanding debt so that its total servicing to banks, the state, and the social security funds does not exceed ⅓ of a debtor’s income.
- We are setting up a public intermediary organization for the handling of private debt, not as a «bad bank», but both as manager of any payment overdue to the banks and as bank controller regarding the implementation of the agreed-upon settlements.
- In the next days, SYRIZA will table a law proposal to extend ad infinitum the suspension of foreclosures on primary residences, valued less than €300000. The law proposal will also include the prohibition to sell or transfer the rights over loans and over land charges to secure the loans to non-bank financial institutions or companies.
- Establishment of a public development bank as well as of special-purpose banks: Starting capital at €1 billion.
- Restoration of the minimum wage to €751. Zero cost.
3rd PILLAR: National plan to regain employment
Estimated cost: €3 billion.
A net increase in jobs by 300000 in all sectors of the economy – private, public, social – is expected to be the effect of our two-year plan to regain employment. Such a plan is indispensable for absorbing the long-term unemployed, particularly those over 55 years, as well as the young unemployed, who would be largely bypassed by economic growth. Our plan would save funds to expand unemployment insurance to more beneficiaries.
- Restitution of the institutional framework to protect employment rights that was demolished by the Memoranda governments.
- Restitution of the so-called «after-effect» of collective agreements; of the collective agreements themselves as well as of arbitration.
- Abolition of all regulations allowing for massive and unjustifiable layoffs as well as for renting employees. Zero cost.
- Employment programme for 300000 new jobs. Estimated first-year cost: €3 billion
4th PILLAR: Transforming the political system to deepen democracy
Total estimated cost: €0.
- From the first year of SYRIZA government, we set in motion the process for the institutional and democratic reconstruction of the state. We empower the institutions of representative democracy and we introduce new institutions of direct democracy.
- Regional organization of the state. Enhancement of transparency, of the economic autonomy and the effective operation of municipalities and regions. We empower the institutions of direct democracy and introduce new ones.
- Empowerment of citizens’ democratic participation. Introduction of new institutions, such as people’s legislative initiative, people’s veto and people’s initiative to call a referendum.
- Empowerment of the Parliament, curtailment of parliamentary immunity, and repeal of the peculiar legal regime of MPs’ non-prosecution.
- Regulation of the radio/television landscape by observing all legal preconditions and adhering to strict financial, tax, and social-security criteria. Re-establishment of ERT (Public Radio and Television) on a zero basis.
Estimating the cost of the non-negotiable plan of immediate measures to restructure society. We have calculated the total cost of the immediate programme for confronting the humanitarian crisis as well as the fiscal cost of abolishing monstrous tax measures. It will be fully covered as follows:
- First of all, from the measures and procedures of settlement and clearance. We plan to collect, at a minimum, €20 billion out of a total of €68 billion in arrears over a seven-year period. That would add approximately €3 billion into the public coffers in the first year.
- Secondly, by decisively combatting tax evasion and smuggling (e.g. fuel and cigarette smuggling), something that requires resolve and political will to clash with oligarchic interests.
- Regarding the starting capital of the public intermediary organization and the cost of the establishment of a public development bank as well as of special-purpose banks, totaling €3 billion, we will finance it from the so-called «comfort pillow» of the, around, €11 billion of the Hellenic Financial Stability Fund intended for the banking system.
- Regarding the total cost of the plan to regain employment: it amounts to €5 billion, €3 billion of which is the cost in the first implementation year. During that first year, the cost will be financed through: €1 billion from the National Strategic Reference Framework 2007-2013 «bridge projects»; €1,5 billion from its 2014-2020 equivalent, and €500 million from other specialized European instruments for employment.
- In addition, considering the huge effort that will be required to restore pensions, our government, instead of selling-out public property, it will transfer a part of it to social security funds. That is the minimum of measures to be taken in order to reverse the catastrophic consequences of the Private Sector Involvement (PSI) on the pension funds and individual bondholders and gradually restore pensions.
ESTIMATED TOTAL COST OF THE «THESSALONIKI PROGRAMME»:
€11,382 billion. ESTIMATED TOTAL REVENUES: €12 billion.