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“I wanted to give negotiations that stalled for too long, a new dynamic. I think that with the Greek proposal I managed to achieve” – rating Tusk at a press conference.
Officials in Athens sent to the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) on the night before the summit proposals for further reforms to boost budget revenues. In the morning it turned out that the file as an annex was wrong and they had to send proposals again. Experts from the institutions representing lenders failed to evaluate the new ideas of the Greeks before the meeting of the Eurogroup. As a result, the finance ministers of euro zone countries were not able to prepare a decision for the leaders.
Tusk and European Commission chief Jean-Claude Juncker, however, praised the proposals of Greece. The head of the European Council even said that the former particulars for many weeks.
“The Prime Minister (Greece Alexis) Cipras assured us that Greek officials will work constructively. The last hours have shown that all parties are fully committed to find an agreement. The new Greek proposals presented by the three institutions are a positive step” – Tusk said, recalling that they will be further analyzed in the coming hours.
The head of the European Commission reported that on Wednesday evening will hold another meeting of finance ministers of the euro area. “I am confident that the Eurogroup on Wednesday will deliver results that will be able to be presented to the European Council on Thursday. I am convinced – and this is not only our intention – that finalize the process this week,” – said Juncker.
Asked whether the summit discussed the possible reduction of Greek debt, Juncker replied: “This is no time to discuss this matter.”
The head of the European Commission pointed out that the Commission is ready to allocate up to 2020. 35 billion euros to support the Greek economy. He added that the 1 billion could be transferred to Greece as early as the second half of 2015.
Juncker announced that it would be funding to support the Greek economic growth. “We need growth, we need jobs,” – said the head of the European Commission. “It would not be money for the budget, only for the real economy”, – he added.
German Chancellor Angela Merkel stated that he hoped that the leaders of eurozone countries only accept on Thursday worked out earlier agreement.
According to unofficial information, which pretended to various sources during the summit that Greece has proposed to include more products and services, the highest 23-percent VAT rate. Concessions are also apply to pensions, including the adoption of solutions that will discourage early retirement (raising the age to 67 years of age already agreed in previous negotiations, but the relevant provisions have remained on paper).
The Greeks also agree to raise the corporate income tax from 26 to 29 per cent., As well as to take in this year’s one-time 12 percent tax on all corporate profits in excess of 0.5 million.
Moreover, the authorities in Athens have proposed introducing a tax on television advertising and acquisition tax on luxury boats and yachts above 10 meters, as well as the reduction of military expenditure.
According to the calculations of Athens all these activities would improve the outcome of the public finance sector by 1.5 percent. Of GDP this year and next by almost 3 percent.
Since the end of February the Greek government leads from the EC, ECB and IMF negotiations on the reforms that are a prerequisite for unlocking financial aid.
The current rescue program for Greece expires at the end of June. If by that time there will be an agreement on the transfer of Athens last tranche of this program – approx. 7.2 billion euros – that Greece threatens insolvency. Until 30 June that Greece has to pay the IMF 1.6 billion, but there is no means.
From Brussels Krzysztof Strzępka and Philip Dutkowski
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