Thursday, June 25, 2015

Greek parliament will reject to ratify the current proposal – will the government fall?

by Secular Investor
Greece IMF Never a dull moment in Euro-land! After the Greeks seemed to have caved over the weekend and after they handed in a new proposal to reduce its spending pattern in the 2015 and 2016 budget by a substantial amount, the government is now taking the heat in the Greek parliament.
At the emergency Euro-top in Brussels on Monday, Tsipras and Varoufakis have brought up a ‘final and best’ proposal to be considered by its European ‘partners’ (read: creditors). The country now ‘suddenly’ found 2.7B EUR of savings/income for 2015 and 5.2B EUR for next year. The majority of the gap will be closed by an extensive VAT reform which would result in an additional cash inflow of 1.4B EUR in 2016. The government also wants to reduce the pension payments by 800M EUR, and it’s now specifically including yachts in a ‘luxury tax raise’ which should bring in 47M EUR. The corporate income tax would also be increased again to 29% from next year on (see next image).
Greek measures The European leaders seem to be optimistic about this new proposal and aims to have a binding solution by the normal euro-top which starts on Thursday.
However, not everybody is happy with the new plan, and Prime Minister Tsipras is getting a lot of heat from the Greek parliament and even some hard-liners in his own party have openly declared they will not accept the newest proposal.
Syriza Tsipras Source

Two members of parliament from Tsipras’ own Syriza party have already announced they would probably vote against the deal , and even a vice president of the government said it would be difficult to bring these ‘extreme and antisocial’ measures up for a vote in the parliament. In the same statement, the MP’s also said they thought Europe to be bluffing and that they wouldn’t dare to push Greece out of the currency block and that Europe ‘wants to humiliate Greece’.
Once again the Greeks seem to be playing with fire and don’t seem to realize how severe and urgent the current situation is. They still behave like Calimero’s (‘they are big and we are small and that’s not fair’) and this obviously didn’t please the current government which promptly released a statement saying that if the parliament wouldn’t ratify a deal, the Greek government would resign.
It looks like like even though a deal might be reached on the European level, it could still be derailed in the Greek parliament and the resignation of the government might put the country in an even worse crisis than it’s currently in.


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