WAT A COS ase g . Boy ws Reforms for the completion of the current programme and beyond Kt wed AS Introduction « & This document presents 2 full summary ofthe reforms and legislative projects Fa conenet Qs ‘of Greece will undertake and Implement under the terms of the coe es a soso of in to complete the review curren MEAFA. tt ls presented to Greece's partners in order is Ha pet creece end te parners can proceed to lunch a new parr and row shoptor for Greece that ges cay to the peopl, in particular the young and unemployed These reform propossie re part of an integrated three ilar approach that includes @ new financing arrangement and support trom European partners for growth and Investment OF financing, completion of the review wit unlock shorterm financing that wil permit the Greek government to meet ils immediate obligations and thus allow for the stabilisation of economy, It should also lead to @ medium-term financing arrangement that will enable Greece to sustainably regain market scoses, These reforms will tske time to bear fruit, and whilst long-term recovery will need to be financed privately, Kick-sterting the flow of invastment funding will require en inital boost. Greece must be allowed io beneft from the substantial means evaltable from the EU budget and the EIB fo support Investment and reform efferts. For the period 2007-2013, Grocce was eligible for EUR 36 billion in grants from EU policies, and should be allowed to benefit from the currently remaining amounts under this envelope. For the 2014-2020 period, more than EUR 35 billion is available to Greece through EU funds, and to holp their absorption, the European Commission's Investment Plan for Europe should provide en additonal source of investment as well as technical help for public and private investors to identify, promote and develop high-quality and feasibie projects to fund, This investment will aso help the Greok state in its fight against poverty by increasing employment and hhelping with social inclusion intiatives. Wo undorstand the Commission is roady to adopt cuch a fplan immediately and count on the other EU institutions for their joint support The Greek government remains fully committed to the program supported by the lending arrangement. it believes that ts policies are adequate to achieve the objectives under the program and stand ready to take any measures that may become appropriate for this purpose as circumstances change. The Greek authorities commit to rotrain ftom any rollback of measures and unilateral changes to the policies and structural reforms that would negatNoly Impact fiscal targets, economic recovery or financial stability, as assessed by the institutions, in fine with the 20 February 2015 Eurogroup statement. The Greek government will consult with the Insitutions on the etontion of any such actions and in acvance of any revisions. The Greek government will confirm its full support to Implement the list of reforms through a vote in Patament in @ matter of days on 2 resolution cn the list of reform in this latter and on 2 set of prior actions that will include the necessary legislation on VAT and othor measures Necessary to deliver the agreed fiscal targets, ‘Tackling the social crisis and strengthening ess across society. ‘The economic crisis has had an unprecedented impact on the welfare of Greek citizens. The most Pressing priotty for the government fs to provide immediate support to the most vulnerable to help ‘alleviate the impact of the economic crisis. Already, a package of humanitarian measures on food, housing and access to health care has been adopted and is being implemented. It Is the collects mission to got people back to work and prevent the ontronching of Iongterm unemployment. ‘The authorites, working closely with European partners, wil initiate maaoures to boost- bee ad — employment by 50.000 people targeting youths, women, the elderly and the long-term unemployed. A fairer society will require thet Greece improves the design of its welfare system, so that there is a genuine social safety net which targets scarce resouross at those who need it most.. The Greek government will take measures to alleviate the impact of the economic crisis on the most vulnerable and will improve the social safety net. It commits to launch a comprehensive Social Welfare Review, including family and disability benefits, with the assistance of the Worl Bank to be completed by _ Setober-2015-Faigeled fo generate savings of % percent of GDP annually’ which will serve as the basis for the redesign of e targeted welfare system Including the gradual rol-out of a Guaranteed Minimum {pcome (GMl) scheme in January 2016. The authorities plan to benefit from available technical assistance from Intemational organisations.—~ 6s ab — Delivering sustainable publl¢ finances that support growth and jobs. ‘The unprecedented adjustment in recent years hes required wemandous saortees (ar) Greece and is elizers, Public tances are now on a more eusteinabie fectng compared to Ws pro-eisie period, although Greece is facing primary dotict of about -2/3 percent of CDP in chsent additional measures.,. The consolidation, has also reiled on a cramatic ecalng back of public investment ond sonices, which wil need to progressively normalize in orcer to sustain ‘prowth potertl. Furthormors, the burden of the fiscal adjustment hes falion more heaviy on certzin groupe, epecclly workers. ‘This will be corrected by widoning the tax base and ty eliminating Toopholes and exemptions and special benafit privilages that have protected certain groupe from bearing a fair share of the edjuetment burden The Greck authortios commit to ensuring sustainable pubic finances end achieve sizeable and sustaincble primary surpluses over the medium-term that will reduce the debt 19 output ratio Steadily and which are in line with the primary surpluses of other Eurozone economies with high levels of public debt. Tho trajectory of the fiscal targets is consistent with expected growth rates of tho Grock oconomy as it recovers from Ils deepest recorded recession. To demorstrate Is commitment to credibie fiscal policies, the Greek authorities will undertake structural fiscal reforms: VY * Sfectve 2s of July 1, adopt a supplementary for 2015 budget and @ 2016-19 masumterm fiscal strategy, supported by a sizeble and credible package of measures + pursue a new fiscal path premised on a primary surphss target of 1, 2,3, and 3.5 percent of V © “cpr in 2016, 2016, 2017 and 2018 end bayond, respectively + bese their fiscal stratocy on parometric messures, including a major simpiticaton of tho VV Var system producing additional revenue of 1% of GOP and a stniciral reform of the pension system with savings of 1% of GOP in 2016 There will be en adtitonal supplementary peckage of paremstic measures, eluding long overdue reforms to close loopholes in the tax system end curtail spending on expenditure items, euch es defence and subsidies. where furthar savinns ara afillfaacihla Vv Paremetiic fiscal measures will be bolstered by @ wide range of administrative actions to address shorffals in tex collection and enforcement: these measures will take some time to beer fruit but offer significant upside fiscel yield going forward. Tho Greek government will monitor fiscal risks including possible court decisions, and stand ready to take offsetting measures as needed to meet the fiscal targets. VAT reforms. Greece has a very fagmented VAT system. As part of its commitment to improve VAT collection, the authorities will adopt legislation changing Paramters Reducing the expenditure calling rikary spendin i ctlons, including # reduction in ho: Mand paneer men with © trgted set of fadcount and procurement 2 An nero oe ae the solderty contribution in 2015. By September 2015, the authortles wil PORSShay hte neamM® Tak Code for income of 2016 to more effectively zchieve co '@ tax system and which simpities the personal income tax credit + Intoduce a reform of the income * Increase the corporate income tax in 2016 fram 26% and 23%,— We al- Introduce a tax on television advertisements, and an intemational public tender wil be announced for the acquisition of television licenses in return for a fee for the acquisition end use of the relevent frequencies. Extend the implementation of the luxury tax on recreational vessels in excess of 10 meters and increase the rate from 10 to 13%, coming into effect from the collection of 2014 income taxes and beyond, In view of any revision of the zonal property values, adjust the property tax rates if necessary to Safeguard the 2018 and 2016 property tax revenues at €2.68 billion and adjust the altematve minimum personel income taxation; Eliminate the cross- border withholding tax intoduced by the installments act (law 0002016) and reverse the recent amendments to the ITC in the public administration act (law 0xxi2016), including the special treatment of agricultural Income (law XXXXI2015);-\o8 OY 7 on roe rlemerting taxaton on Gross Gaming Revenues (GCR) of 30% on VLT gor fexpacted to be inetalled at second haif of 2016 and 2016 «+ Launch the tender process for the issuing of 4G and 8G licenses. a + increase te rat of he tonnage tax and phase out special es eatments ofthe sriepIng SUSY + Onnealth car, the governmont wl r-estbish full INN preeeipon, without excepions eas the price ofall oftpatentcrugs and all generics, by repealing the grandfatherng Gee, the prices of chagnostc tests and stranathen the pharmacautcal rebates: and imPemen At extend to 2016 the clanback for private clinics, diagnostics end pharmacoutlosls, BY ent! December 2016, increase the proportion of centralized procurement, of ganeris medlenes ane af procurement by hospltele of pratmaceutical products by acta substance, nthe wi agreed lergets, and take structural measures as needed fo ensure that spending for 2016 isin line with the clew back colings. evtember 2015, te governmont wil simcity te personal inca tax credit schedule; re-design and oer Rela olny suchoge fo Income of 2016; ave a euler on nes and edopt ater remaining income tax reforms. By November 205, the authorities wil issue all secondary legislation to implement the income tax and tax procedure code raforms, with effect from January 1, 2016, Also oy November 2015, tre authortes wi cody and singly te VAT legato, aging with ha ex precede code ehminetng osancing loopholes and shortening ho VAT payment period nd singly the income tax regime and ensure consistency of the income base for income tax and social security Coninitlons of sifah businesses below te VAT regitatin threseld ‘Tox administration reforms. ‘The abilly 10 collect taxes has been hampered by a long history of complicated legislation, poor administration, political interference and generous amnesties, with chronically weak enforcement To break from this practice and improve the tax payment culture, the government firmly commits to not introduce new installment or other amnesty or settlement schemes nor extend existing schemes, ‘The authostes will + Adopt legistation to establish an independent tax and customs agency, which will be fuly functional by end-June 2016, and wil integrate all tax and customs related staff and functions, including those of SOOE:; by Cctober 2015, they will appoint the Board of Govemors and edoct priority secondary lesislation ofthe law on the autonomeus revenue administration agency. ‘avidly reinforce on a permanent basis the capacity of the tax administration especially on |ssues of liquidation and tax collection from large deblors; and by October 2015, reinforce the Largo Debiore Unit with hghy skied egal advisors to improve te capacity fe assess dior viability Implement measures to improve,tax and SSC collection by stonathening enforcement fools such as gatnishments; by October 2016, adopt a fuly-fedged plan to increase tax ‘compliance, iésue legislation to quarantine uncollectable Social securty contribution debt anci lake steps to filly stlf KEAO and provide it with access to relevant tax admiistrton information, ‘Amend legisletion on installments to among others exclude these who feil to pay curont obligations and introduce a requirement to shorten the duration for these with the copackty {© pay oorlior and market-based interest rates; The large dabtor unit and KEAO will assess by September 2016 the large debiors with tax and eociel seourty debt ebove 1 milion EUR to \etify their capacity to pey and take corrective actions. Intensify fght by the SGPR against tax evasion through checks on bank transactions, and—le8 ov ‘This stretegy will aim to retum the barks to full private ownership by attracting stratege Intemational investors and to achieve 9 eustainabie funding model over the medium term. ‘The authorities will further develop and swifly implement a comprehencive strategy for adéressing the iecue of non-performing loans, drawing on the expertise of external strategic consuitant{s) for both strategy development end implementation, It wil also include the establishment of a permanent. scelal safety net including support measures for the most vulnerable debtors. and a temporsry moratorium cn auctions until end 2015, differentiating between strategic defaulters and good faith debtors, ‘A forward-looking assessment of the banks! capital needs will be dane in the context of the next review. —“re—_—cs a Labour markets: In recent years, important changes have been made to Greck labour market institutions end wage bargaining systems to make the laser market more flexible and effective, and they will not be reversed, Tho Grosk authorities are committed to achieve EU besi practice across the range of labour market legislations through constructive dialogue amongst social partners. Tha approach rot only needs to balance flexibility and faimecs for employees and empioyers, but also needs fo consider the very high number of unemployed. This can be achieved by modemising Ieqislation through a process af consultation with the social pertners and benefitna from excerise of think tanks 2s well ‘5 Intarnational organisations such as the OECD and the ILO. The aahorbes wil review, Trough @ CONGUE prODses The” SSNS TaMEWORS ToT COTS onicoa, incustil action, and colectve bargaining faking info account best pracioes elsewhere in Europe, Furtor input to the review described above wil be proviled by inlerational organisatons, including the ILO, Following the conclusion of the review process, the autores nil ting the collective dismissals ond industrial action frameworks in ine with best practoe inthe EU by December 2076. Further, the authorties wil take action to fight undeclared work in order to strengthen the compettiveness of legal companies and to protec! workers as well es tax and social seoutty revenues. By October 2015 the authortes vil expand vocational education and tening within tho budgotery envelopes Product markets: More open markets are essential to improve social fairness by curtaliing rent-seeking and monopolistic behavicr, which has translated into higher prices and lower living standards. The authorities will intensity their efforts to bring Key initiatives and reforn proposals to fruition, drawing on tectnical expats of sttuton including tho OECD and Word Bank. The auloris wil leg Implement all pending recommendations of the OECD competion toolkits | and i! and by January 2016 the recommendations following the further wetk by the OECD in collaboration with the Grook authorities, which will include a variety of product markets and other areas of structural reforms. The authorities will also work with the OECD to review by January 2018 the implementation of tha Comeelition Assessment and Administrative Burden oxorcises, open Immediately selected reetrcted professions, and by Ociober 2018 the remaining ones, and Nberalize specific markets Including tourist related rentals and fery transportation «+ sliminate reciprocal and non-reciproca: nulsence cherges. reduce red tape, including on horizontal liesnsing requitements of investments and on lows tsk— hog aS = ead, by October 2018 the authortes wil takes steps to i Wve land management, and by February 2016 will vg law in eafeboration wth tre Workd Bank and preparation cf legislation. Looking at faciftate trade and by December 2015 to impro' implement secondary legislation for the licensir forthcoming OECD recommendations in agreed key sectors. Privatisation: The Greek euthorties are commited to approving and proceeding with an ambitious privatisation ‘program. “The authories are commited te proceeding with an ambitious privatization process, tho implementation cf ich sims to generate annucl proceeds (excluding bank stetes) for 2015, 2016 and 2017 of EUR tn, EUR. 3.7 bn and EUR 1.2 bn, rospectivaly. The uthorties are committed to privatise ail assets held by HRADF and to complete all government pending actions. Among other actions, the authorities wil take Immediate lireversible steps for the sale of the regional airports, and Hellinikon, transfer the state's shares in OTE to the privatisation agency HRADF, finalise the terms for the sale of the Pieeus end Thessaloniki ports and of the train operator, and advance with the tender to extend the concession agreement in the Athens International Airport and soll shares, For real estate projects, the HRADF wil set annual proceeds targels consistent with the overall privetisation revenue target. Energy: ‘The authorities will adopt the reform of the gas market and its specific roadmap, and implementation should follow suit, They wil adopt and implement the reform of capacity payments and other electneity market rules, review PPG tariffs basad on costs and notify NOME products. The autherties will elso continue the implementation of the roadmap to the EU target mode! in the’ electncity market , The authorities wil prepare a framework for the support of renewable energies and implementation of energy efficiency and review energy taxation. The authoriies will clear the public sector's arrears 1o PPC and strengthen the electricity regulator's financial end oporational Independence. The government will take ieversible steps (Including announcement of cate for submission of bincing offers) to privatize the olectiity trenemiasion company, ADMIE. By November 2015, the euthorkies wil introduce the NOME system of auctions; adopt and implementing secondary legislation and regulation forthe ges reforms, and review energy taxation: ae eeracd wii transpose the Directive 27/2012 on energy efficiency and introduce a new Plan for the upgrade of the electricity grids in order to Improve performancs, enhance int rfomance, enhance imtorperbi and reduce costs for consumers. oy Public. administration: The authortias will adopt legislation for @ Unified wage grid reform effective 1 Jan, 2046, iv ii with the agreed wage bill targets, eo eee Including decompressing the wage distibution across the wage ‘Spectrum in connection with the sill, performance and responsibilty of stat Secondary logislative ects needed to implement the now unified wax eit i, Salaries of each employee as of 31/12/2014, and legisietion to rationalise the emcee wae aris, wil Ue adopted by ond. November 2016. The authories wil sat a calng rte agate “ann the new MTFS, and the level of pubiie employment consistent with achieving ae gets and ensuring @ declining path of tho wage bil relative to GDP until 2019, They wil align non.wage benefits acrees the public administration with EU hast practices, ge grid with a guaranteed starting—\6Z ao — of all employees, and compleie the tiring of new managers by the end of the year. They wil Continue to identity past cases of Wlagal hires and temporary injunctions, and take approprisie enforcement action, Justice ‘Tha authorities will legislate and implement the new Code of Civil Procedure in line with previous ecreement. Thoy wil propose further actions to reduce the backlog of cases in aémiriatatve ‘courts and to introduce a selective increase of court fees. The authorities will elso continue to work closely with European insttutione and technical assistance on the modernisation of the judicial system including initiatives in the area of judicial e- Government (e-justice), mediation and judicial statistics, Anti-corruption: The authorites will updete and publish a revised Stategio Plan againct Corruption (TRANSPARENCY) In late July. To thls end, it has set up a working group with participation from representatives from the Ministry of Justice and the General Secretariat for the Fight against Corruption. The authorities will amend and implement the legal framework for the declaration of assets and financing of the political parties and adopt legislation insulating financial crime and ant-coruption investications from political intervention in individual cases. They will also ensure proper coordination sn sratng sh formation bowen Fvonigaon foes t a oon vosgation bodes the @ Goong Baty of Francs Prosecutors and of Corruption Prosecutors. ’ Statistics: The Greok cutories wil ao 1 wil opt laslaton to stenghen the govemanto and in ELSTAT, and ensure its proper access to administrative data, “operas ot