ATHENS: A bridge program that will cover Greece’s financial needs for July has been discussed by European Commission President Jean-Claude Juncker and the president of the socialists in the European Parliament, Gianni Pittella.
The bridge deal will precede the third bailout program Greece has requested from the European Stability Mechanism and it is an idea that President Juncker discussed with Prime Minister Alexis Tsipras last week. Greece’s financial obligations for the summer amount to 6 billion euros in July and 5 billion euros in August. They include loan repayments, state bonds, domestic debts and state expenses.
Regarding debt negotiations, the starting point will be the June 25th proposal presented to Greece by the European Commission. The proposal includes maintaining value added tax for hotel services at 13 percent and alternatives for supplementary allowances to low pensions (EKAS).
Greece’s European partners reject the 30 percent discount on Aegean islands VAT claiming that it complicates the tax system and makes monitoring difficult. Also, they reject maintaining the 80 percent instead of the 100 percent advance payment of corporate taxes because such a policy does not apply anywhere in Europe.
European creditors also want to examine again tax revenues so far and the condition of the Greek banking system. According to European officials, it is important that Athens shows the committment to take measures and acknowledge their importance. In other words, the Greek government must show that it has ownership of these measures and believes that they are necessary and beneficial.
