Greece’s coalition government –- only the country’s third in more than 40 years –- unveiled over the weekend the policy platform which it hopes will provide the basis for cooperation between its three components -- New Democracy, PASOK and Democratic Left.
The document set out the main points of Greece’s loan agreement that the coalition would like to renegotiate but also set out policy in a number of other areas, including growth, taxation and reform of the political system.
In terms of the bailout, the three parties agreed to ask Greece’s lenders for two more years, up to 2016, to bring the public deficit under 3 percent of gross domestic product. This would allow the government to meet its fiscal targets without making further cuts to wages, pensions and the public investment program. Instead, savings would be made from tackling corruption, waste, tax evasion and the shadow economy.
The coalition also intends to ask for permission to extend unemployment benefit from one year to two and to limit any outstanding tax payments to 25 percent of each taxpayer’s income, with the remainder to be paid in two annual payments over the next two years. The government also wants to reduce value added tax for food catering to 13 percent from 23 and to replace all property taxes with a single, progressive charge.
In what could prove its most controversial proposal, the coalition proposes that no civil servants should be fired. The process to privatize state assets, however, will not be shelved. The coalition wants it to be linked to a growth strategy, not just for revenue purposes.
It puts forward a “national regeneration plan” based on identifying sectors of the economy, such as agriculture, that should be targeted for growth and better us of EU structural funds. The government also wants to overhaul the tax system in favor of one that will remain stable for the next 10 years.
In terms of political reform, the parties suggest checks on the assets of all those who served as ministers and senior civil servants since 1974. They also propose that ministers’ immunity should be lifted if they are accused of committing financial crimes. Similarly, MPs should lose their immunity if they commit offenses not related to their political activity. Deputies will also lose extra payment for taking part in parliamentary committees and new MPs will not receive a pension after serving two terms in Parliament, as they do now. Instead, they will receive a normal state pension. Former deputies who are already receiving pensions will have those payments capped.
The coalition also wants to set up an independent body to inspect the finances of political parties and MPs. Parties will have their public financing reduced.