The list of proposed reforms Greece sent to its international creditors bears many similarities to the requirements of the abandoned bailout program, the Memorandum. The terminology used is different though. European Commission sources, however, note that there should be further specifications on the Yanis Varoufakis list that Athens has to present by the end of April. Taxation and VAT There are many similarities in the two lists, especially in Value Added Tax. In both texts the Greek side appears to make a binding commitment to rationalize or revise VAT. Although this commitment is not clear, it is similar to the email sent by Gikas Hardouvelis — the previous finance minister — in which Athens had pledged to increase VAT in tourism and had lobbied for the abolition of low VAT on islands. What further reinforces this similarity is the explicit Varoufakis commitment to limit exemptions and elimination of unjustified deductions. The only difference is the reference to “avoiding policies that are not socially just.” Resemblance to the Income Tax Code The Income Tax Code is very similar. In the latest update of the Memorandum, Athens was committed to record all tax incentives and will quantify them as tax expenditures, while in the second phase those deemed inadequate or inappropriate would be eliminated. Approximately the same is the commitment of the new government, although it promises to modernize the Income Tax Code, to abolish all exemptions and replace them with social transfers. No mention of ENFIA repeal Regarding the Single Property Tax (ENFIA), there is no reference that it will be repealed. The Greek government says that it is a measure not related to the four-month “bridge” period and it will be discussed with Greece’s partners in June, when new negotiations on the new contract take place. The provision for Payroll review Similarities exist in the field of remuneration of the State. In particular, the Memorandum has no provision for review of Payroll, as well as the review of the framework of non-wage earnings such as business travel. In Varoufakis’ list there is also a commitment to rationalize non-wage earnings, as well as the reference to the decompression of the wage distribution, implying that there will be changes in the wage distribution. The main difference is that while the previous government was planning to reduce entry-level salaries of public employees, the Varoufakis list contains an explicit commitment that such reduction will not be implemented. Differences in the labor market Regarding the labor market, there are many differences between the two texts. Although in the Varoufakis list there is no timetable to restore minimum wage, as well as for the activation of collective negotiation of contracts, the updated text of the Memorandum was based on the abolition of sectoral agreements and required new flexibilities. The Troika had asked Hardouvelis to restore the institution of the lock out, release procedures for mass layoffs and to tighten the requirements for launching strikes. The Varoufakis text makes a general reference to the adoption of best labor practices in collaboration with the ILO and the OECD, collective bargaining so as to combine flexibility with justice, as well as the ambition to increase (over time ) of minimum wage, without affecting competitiveness. Similarities on Insurance On the subject of Insurance, in the Varoufakis list there is no explicit reference to the abolition of the zero deficit clause on supplementary pensions and the question is whether to apply the provision of the Memorandum on application of clause by 1 / 1/2015, as the measure has already been passed by the previous government. The two texts are identical on the commitment for closer linking of contributions to earnings, while there are also similarities in the commitment to close black ‘holes’ in insurance funds and deal with the incentives for early retirement.
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