Eleven of the 140 “prior actions” included in a recently disclosed “supplementary memorandum”, as the draft agreement between the leftist Greek government and creditors is called, impose an additional one billion euros worth of social security contribution hikes and spending cuts in the country for 2018 alone.
If the measures actually find their way onto emergency legislation set to be tabled in Greece’s Parliament on May 16 they would be heaped on top of already proposed austerity measures for 2019 and 2020, mostly pension cuts and a lowering of the annual income tax threshold in order to tap more wage-earners — 1 percent of GDP in the first case (2019) and 1 percent of GDP in the second (2020).
The additional measures purportedly show creditors’ – especially the IMF’s – uncertainty over the Tsipras government’s ability to meet ambitious annual primary budget surplus targets, which will be fixed at 3.5 percent (as a percentage of GDP) extending to 2022. The latter year is cited in the supplementary memorandum revealed this week and published in Greece by “N”.
The 11 measures include:
– a change in the way contributions by self-employed professionals and tradesmen are calculated, with the change translating into higher monthly obligatory payments to relevant pension funds
– an increase in the factor used to calculate professional farmers’ social security contributions, from the current 14 percent to 17 percent
– abolition of various social benefits and stipends, a modest spending reduction measure set to cut state spending by 8.5 million euros in 2017 and 10 million euros in 2018
– curtailing expenditures for subsidized heating oil by 50 percent
– abolition of various tax breaks still on the books and deductibles, such as medical expenditures
– Imposing a “temporary tax” on shipping companies based in Greece to 2018
– “harmonizing” so-called special wage categories for various castes of professionals employed in the public sector, such as military officers, physicians etc.
– re-imposing a so-called “added value” tax on property transactions, as for Jan. 1, 2018
– a further cut, by 238 million euros, in a monthly social security benefit allocated to low-income pensioners
– activation of an unpopular surcharge on overnight stays at hotels and rooms to let, a measure that had been temporarily suspended
– imposition of a tax on short-term leasing of dwellings and rental properties, essentially an attempt to collect a ” Airbnb tax”
