New Democracy, Pasok and the Democratic Left agree that plans to cut 150,000 public-sector jobs should be scrapped, the document, received by e-mail from the Greek government today, showed. Proposals also include reducing sales tax for cafes, bars, restaurants and the agricultural industry, and increasing the threshold for paying income tax.
The government affirmed its commitment for the need to reduce deficits, control debt and implement the structural reforms the country needs, the policy statement showed.
Prime Minister Antonis Samaras held his first Cabinet meeting on June 21 after his New Democracy party won Greece’s general election on June 17 on pledges to renegotiate parts of the 130 billion-euro ($163 billion) second bailout from the European Union and International Monetary Fund while keeping Greece in the euro. Samaras joined forces with Pasok, which finished third on June 17, and sixth-placed Democratic Left.
Greece has slipped behind budget-cutting targets that euro- area nations and the IMF imposed in exchange for 240 billion euros in aid pledges in the past two years.
The policy document underlines that cuts envisioned for 2013 and 2014 should come from public spending and clamping down on tax evasion and not from pension and wage cuts or from the public investment budget.
The government will also propose that a law cutting the minimum wage by 22 percent be repealed, the coalition partners said in the document. Unemployment benefit should be paid for two years instead of one.
The coalition partners plan to create a stable tax system for the next 10 years with lower indirect tax rates and will ask for pension fund portfolios, which suffered losses when their Greek bonds were tendered in the country’s debt swap, to be recapitalized, the document showed.
Samaras’s campaign pledge to cut tax rates for businesses to 15 percent from 2013 hasn’t been included in the list of issues to be negotiated, the document shows.
The partners support state-asset sales, a key plank of plans to reduce Greece’s debt, and will negotiate with creditors that some of them, like the national rail company OSE, be carried out through public-private partnerships, according to the document.
The Greek state is seeking to raise 50 billion euros from state assets, half of which are real estate, by 2020 to meet conditions of its bailout agreement. The process was halted after the country’s first election on May 6 produced no government.