Greece vs. its creditors, points of agreement and discontent

The chances of a compromise solution for Athens are slim at the Eurogroup meeting on Monday.

Non-toxic points of compromise

1. Taxation

■ Abolition of tax ameliorations.
■ Combatting tax fraud and tax evasion.
■ Changes to tax settlements and insurance funds for increases in revenue.
■ Restructuring and reinforcing independent tax administration.
■ Taxation on group investments.

2. Public administration

■ A new system of payment and joint salary chart for the public Sector.
■ Infrastructure evaluation and new organizational chart for ministries.
■ Institutionalization of goals and employee evaluations.
■ Evaluation of funds for public sectors.
■ Restructuring plan for public utilities.
■ Improving ‘fiscal rules’ that would offer greater financial flexibility to public institutions.

3. Insurance

■ Fund mergers.

4. “Red loans”

■ New debt settlement regulation that differentiates between home loans and others.
■ Bank consolidation from problematic portfolios.

5. Bankruptcy Code 
■ Changes to the Bankruptcy code and reinforcement of legal mechanisms.

6. Competitiveness

■ Lifting obstacles to competition in wholesale trade, construction, telecommunication and electronic trade based on OECD research.
■ New law for investment licensing.

Red zones – Points of friction

1. The continuation of the primary surplus at 3-5%. The Greek government wants this to be put down to 1.5%.

2. Covering the fiscal gap estimated at 2.6 bln euros by the troika of Greece’s international creditors from the European Commission, European Central Bank and International Monetary Fund.

3. Insurance:

■  Lifting the retirement age.

■ Limiting early retirement.

■ Zero pension deficit.

4. Employment

■ Aligning the framework for mass dismissals with EU legislation.

■ Harmonizing Greek trade unions activities with EU practices.

■ Freezing the minimum wage and group negotiations for three years.

5. Taxation

■ Restructuring VAT tax and abolishing the reduced VAT for islands, etc.

■ No tax exemptions for wages and pensions in 2015.

■ Replacing the joint property tax ENFIA with a new tax for large landowners known as FMAP.

■ Cutting government officials’ perks.

■ Cutting government officials’ wages.

■ Combatting tax evaders and the black trade.

■ Extra revenue for a debt settlment with the Greek Tax office for debts incurred until December 2014.

Bridging Deal

Greek Finance Minister Yanis Varoufakis has consistently sought a 4-to-6-month bridging deal that would give Greece leeway to renegotiate its debt.