The Greek government has covered half the distance on the issue of primary surpluses and expects the institutions to meet it half way, government sources said on Tuesday, adding that Athens has proposed a primary surplus of 0.75% for 2015 and 1.75% for 2016. The sources also said that in the new proposals sent to the institutions on Monday, revising a 47-page proposal presented last week, the government has hiked the medium VAT rate to 12%. The initial proposals called for a medium VAT rate of 11%. Athens has also asked creditors for a clear commitment, outlining when and how there will be a settlement on Greece’s debt. On the basis of the revised proposals from the Greek side, there would be three VAT rates: a low 6.5% rate reserved for pharmaceuticals, books and theatre tickets, a medium 12% rate for newspapers, magazines, fresh and staple food, water and power, hotels and restaurants, and a high 23% rate for all other goods and services. The government’s plans are still unclear in regards to the VAT rate on Greek islands, which currently enjoy low VAT to offset the handicaps of island life. There have been thoughts within the government that this lower rate should remain but equivalent measures must be found instead, which makes this difficult. The government is now awaiting a written response to its new proposals before Wednesday’s meeting between Prime Minister Alexis Tsipras, German Chancellor Angela Merkel and French President Francois Hollande. (source: ana-mpa)
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