Deal hopes rise after Tsipras capitulates

( The Guardian) — Last night, the Greek PM finally submitted an economic reform plan that looks terribly similar to the measures he’s been battling for months, in return for a €53.5bn bailout.
Greece is now proposing sweeping changes to VAT, standardising at 23%, and abolishing exemptions on its islands. Corporation tax will rise to 28% (as its creditors demanded), not the 29% Greece wanted. And it will crack on with raising the retirement age to 67.

The Greek proposals include:

  • tax rise on shipping companies and scrapping tax discounts for islands
  • unifying VAT rates at standard 23%, including restaurants and catering, which has been shown to reduce revenues and increase uninsured labour. Was abolished unilaterally by the previous government and revenues increased. Hotel VAT rates up to 13% will also adversely affect the tourist industry.
  • phasing out solidarity grant for pensioners by 2019
  • €300m ($332m; £216m) defence spending cuts by 2016
  • Keep the property tax for 2015 and 2016
  • 100 percent advance payments for corporate income
  • increase the rate of the tonnage tax and phase out special tax treatments of the shipping industry.
  • increase the health contributions for pensioners from 4% to 6% on average and extend it to supplementary pensions
  • create strong disincentives to early retirement,
  • reform the unified wage grid, effective 1 January, 2016 (public sector salaries)
  • Publish a revised Strategic Plan against Corruption by 31 July 2015
  • Adopt legislation to establish an autonomous revenue agency
  • open the restricted professions of engineers, notaries, actuaries, and bailiffs and liberalize the market for tourist rentals

It is a complete capitulation by the Greek government , after European leaders called a summit on Sunday to plan for Greece’s exit from the eurozone.

Alexis Tsipras is meeting with his MPs this morning to discuss the plan. That could be a bumpy meeting, given Syriza’s opposition to austerity.

But it does appear that Greek MPs will approve the plan; a vote is expected today, so that the country’s PM and finance minister can negotiate at this weekend’s crunch meetings.

The goal – an agreement that would allow Greece’s banks to reopen and some level of normality to return.

But how will the plan be received across Europe? And how will the Greek people react to the news of another programme, especially after voting to reject a very similar package last Sunday?