12 July 2011

Council decision addressed to Greece with a view to reinforcing and deepening fiscal surveillance

Greece shall adopt the following measures before the end of June 2010:

(a) a law introducing a progressive tax scale for all sources of income and a horizontally unified treatment of income generated by labour and capital assets;

(b) a law repealing all exemptions and autonomous taxation provisions in the tax system, including income from special allowances paid to civil servants;

(c) the cancellation of the budgetary appropriations in the contingency reserve, with the aim of saving €700 million;

(d) the abolition of most of the budgetary appropriation for the solidarity allowance (except a part for poverty relief) with the aim of saving €400 million;

(e) a reduction of the highest pensions with the aim of saving €500 million for a full year (€350 million for 2010);

(f) a reduction of the Easter, summer and Christmas bonuses and allowances paid to civil servants with the aim of saving €1,500 million for a full year (€1,100 million in 2010);

(g) the abolition of the Easter, summer and Christmas bonuses paid to pensioners, though protecting those receiving low pensions, with the aim of saving €1,900 million for a full year (€1,500 million in 2010);

(h) an increase in the VAT rate, with a yield of at least €1,800 million for a full year (€800 million in 2010);

(i) an increase in excises for fuel, tobacco and alcohol, with a yield of at least €1,050 million for a full year (€450 million in 2010);

(j) legislation implementing the Services Directive ( 1 );

(k) a law reforming and simplifying public administration at local level with the aim of reducing operating costs;

(l) the establishment of a task force aiming at improving the absorption rate of structural and cohesion funds;

(m) a law to simplify the start-up of new businesses;

(n) a reduction of public investment by €500 million compared to plans;

(o) the channelling of the budgetary appropriations for the co-financing of structural and cohesion funds to a special central account that cannot be used for any other purpose;

(p) the establishment of an independent financial stability fund to deal with potential capital shortfalls and preserve the soundness of the financial sector, by providing equity support to banks as needed;

(q) the reinforced supervision of banks, with increased human resources, more frequent reporting and quarterly stress tests.

Full Council decision

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