At yesterday's meeting, representatives of the three parties which drew up the coalition government agreed that from next year the non-taxable minimum will be changed back from 5000 euro to 8000 euro. This measure was adopted unanimously by the negotiators and will be included in the programme statements, which the Greek prime minister will read to the Parliament in the next few days so as for the government to obtain a vote of confidence. It is, however yet to be seen whether the measure will be approved by the supervisory Troika.
As everyone recognizes, this is the first bold step to alleviate the situation of low income people who had to face some serious challenges in implementing the programmes for fiscal stability.
Principles – commitments
After intensive and tense negotiations, which lasted for three days, the representatives of the triple coalition government reached yesterday to the compilation of a detailed text of 7 pages, setting programming principles and commitments which reflect to a great extent the parties' election promises and will be supported by the leaders of the three parties. The text includes the following topics:
- Measures for direct management.
- Agenda for negotiations with the EU partners.
- National Strategic Development Plan.
- Measures to reform the political system.
- Public Administration.
- Foreign Policy and the exclusive economic zone.
The working group finished work yesterday with mutual concessions and reasonable proposals on all urgent issues. Apparently it will turn into a permanent body to address crisis, aiming at settling all disputes between the three partners in the government coalition. An agreement was reached to postpone at first the taking of measures amounting to € 11.5 billion required by the supervisory Troika for September. This was done in order to examine the attitudes of the creditors regarding the request that the country will formally submit for the extension of the memorandum until 2016, as well as to seek appropriate fiscal measures to offset any losses. The goal is to save money by limiting the wasteful spending in the public administration, combating tax evasion and corruption.
Since everyone recognizes the need to put the "steam engine" of the economy back in motion, it was agreed that henceforth not a single euro from the Public Investment Programme will be cut. And it should be specifically noted that the parties agreed on drawing up a rescue programme for the state Agricultural ATE Bank. The first step will be recapitalization of the bank.
Although the Supervisory Troika is exerting some pressure for cuts in the public sector and for the closure of redundant state structures, the governing coalition decided unanimously that there will be no layoffs and it will cancel the labour reserve for civil servants, which is anyway already "at the last gasp". Furthermore, New Democracy gave up the term "privatization" and instead the term "denationalization" was chosen with the primary aim of protecting the enterprises of strategic importance, which have still remained under state control.
Moreover, it strengthens the collective autonomy, with the withdrawal of the state from the collective bargaining process to allow employers and employees to negotiate on their own on the collective agreements.
Within the programme commitments of the three parties of the coalition government, the representatives of New Democracy Vangelis Meimarakis and Chrisantos Lazaridis, representatives of PASOK Costas Skandalidis and Stelios Angeloudis and those from the Democratic Left Party Dimitris Papadopoulos and Andreas Hadzisokratis, agreed on the following:
- That measures be taken for the settlement of the loans of over-indebted households and firms that are not able to pay their obligations under the present conditions.
- Not to cut wages and pensions.
- To extend the provision of unemployment benefits from one year to two years.
- That measures be taken for the disadvantaged and vulnerable social groups.
In particular, with regard to the tax bill, one of the first bills, which the newly formed cabinet will address, it was decided to reduce to 12% VAT on essential goods and restaurants, but at the insistence of the Democratic Left Party tax rates of companies will not be reduced more.
The removal of the additional property tax that citizens had to pay with their electricity bills is also expected to follow. This fee will be replaced by a general property tax, which will simplify the convoluted system for taxing real estate, and will combine all the previous taxes.
Reduce funding for political parties
The views of the representatives of the three parties joined also around the reduction of state subsidies for the parties represented in Parliament, the amendments relating to parliamentary immunity, as well as on the fundamental change of the law on ministerial responsibility. The question remains open for changes in the electoral law.
It was also agreed that the "Rangusis" law on immigrants remain unchanged and for centres for immigrants to be built.
With regard to "the life" of the new government, it seems that the separate conflicting views were neutralized by the wording that the duration of the operation of the government will be as specified in the constitution of the country.