The full part of the report titled "Looking for a political agreement" states the following: "The mission found that there were some similarities between the economic stability program of the government and the political proposals of the opposition party New Democracy. The opposition supports an expanded privatization program, as there is a match in the concepts of the party with regard to most structural reforms aimed at stimulating the growth. As to the issue of taxation, there also is an agreement on the part of New Democracy to reduce the deficit and to limit the foreign debt to some reasonable level. In addition, a number of measures from the stability program, such as the adoption of a scheme with labor reserves for the officials in excess, the closure or merger of government services, the elimination of tax preferences, the objective criteria for the self insured and the measures to control the waste of funds in healthcare, have been taken from the economic program of New Democracy.
Nevertheless, the mission believes that the greatest reductions in taxes (VAT, income tax for individuals and businesses, fuel excise duties, etc.) in the economic program of New Democracy are unrealistic and incompatible with the overall objectives of the stability program.
Both the government and the opposition should work together starting with the autumn for the adoption of a fiscally neutral tax reform that will seek to broaden the tax base and eliminate tax concessions that could lead to a reduction in labor taxes. "
«Treuhandanstalt» for the privatization
According to the model for the liquidation of state property in East Germany.
Technocrats, taken from the free market - banks, business consultants - and two experts chosen by the European Commission and Εurogroup will undertake the mission to accelerate the privatization program and utilization of state property, so that Greece can receive 50 billion by 2015. The model on which the whole initiative will be based reminds «Treuhandanstalt», the organization which had undertaken the liquidation of state property in East Germany in the early 90s. Then within three years nearly 8,500 state enterprises were sold.
How will the Fund of National Wealth function
1. It will be regulated by the national legislation, it will have a term of six years, it will be managed by a council in which the European Commission and Εurogroup will be entitled to appoint two members.
2. The Council will be composed of individuals (experts) working in the private sector.
3. Every four months it will inform the government, parliament and partners for its activities.
4. The government and the state will transfer the Fund the total "legal and financial" ownership of the state enterprises and their assets that are to be privatized.
5. There will be no right to "return" to the government assets that it failed to capitalize.
6. It will be financed with 30 million euro and by the public investments program, while it receives its first revenues from privatization.
150,000 civil servants less
In support of medium-term program that caused the political storm in the recent weeks as the only solution (basic plan) to exit the crisis, the Troika noted that its purpose is to reduce the deficit to 2.5% of the GDP in 2014 and further more in 2015. In order to achieve this goal, however, it is necessary to take measures that will lead to the increase in revenues while reducing public expenditures by 11 percentage points of the GDP, ie more than 27 billion euros. For this initiative to succeed it is noted that changes must be made across the public sector, starting by reducing the number of civil servants by 20% by 2015 and reducing them to 577,000 from the present 727,000 people.
Labor reserves
In public organizations, which will be closed a regimen will be applied of labor reserves. As noted in the report "the additional staff are expected to be left as labor reserves", a proposal made by New Democracy, accepted also by the former Minister of Finance, without however determining the exact number of employees that will be affected by the measure.
To achieve the reduction in the number of employees the principle must be followed for "one appointed for every ten people left", and drastic will be within 5 years also the reductions in wages and pensions in the public sector, and all of its expenses.
Structural changes now
The report acknowledges that there is an improvement in the competitiveness of the economy, which is attributed almost entirely to the reduction of salaries in the private sector. It is emphasized, however, that structural changes have not yet reached to the point where they influence the increase in productivity and its capacity for growth.
Some measures and changes are being prepared to improve the business climate, while the discussion has already begun to reform the judicial system as he stressed in his speech before the PASOK parliamentary group, the Prime Minister George Papandreou.
To advance the structural changes the Troika will provide "technical assistance" by appointing «project managers» in the ministries for the reform of the labor market, the market of goods and services as well as to accelerate investment.
The report stresses that the Government had requested "technical assistance" for changes in health care, social security, taxation and the changes in the Employment Agency, particularly in the section on retraining of personnel.
There is a vacuum in funding
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