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Varoufakis' list: Significant for tactical reasons

globinfo freexchange

Most of the elements in Varoufakis' list approved by Greece's lenders  (http://failedevolution.blogspot.gr/2015/02/breaking-eurogroup-approves-varoufakis.html), are quite flexible for interpretation. They refer to the fight on tax fraud, especially for the big incomes, and commitment for the significant restriction of unnecessary costs in the public sector. These things were promised already by the current government before the elections.

Characteristic parts:

“Broaden definition of tax fraud and evasion while disbanding tax immunity. [...] Resolutely enforce and improve legislation on transfer pricing. Work toward creating a new culture of tax compliance to ensure that all sections of society, and especially the well-off, contribute fairly to the financing of public policies.”

and

“Staff adequately, both quantitatively and qualitatively, the GSPR [General Secretariat of Public Revenues] and in particular the high wealth and large debtors units of the revenue administration and ensure that it has strong investigative/prosecution powers, and resources building on SDOE’s capacities, so as to target effectively tax fraud by, and tax arrears of, high income social groups.”

In essence, this is what SYRIZA was telling before the elections, concerning the taxing of types of transactions of millions that enjoy tax immunity. Therefore, naturally some may be particularly annoyed.

Other parts reveal government's determination to fight big interests:

“Greece wants a modern public administration. It will: Turn the fight against corruption into a national priority and operationalize fully the National Plan Against Corruption. Target fuel and tobacco products’ smuggling, monitor prices of imported goods (to prevent revenue losses during the importation process), and tackle money laundering. The government intends immediately to set itself ambitious revenue targets, in these areas, to be pursued under the coordination of the newly established position of Minister of State. [...] Activate immediately the current (though dormant) legislation that regulates the revenues of media (press and electronic), ensuring (through appropriately designed auctions) that they pay the state market prices for frequencies used, and prohibits the continued operation of permanently loss-making media outlets (without a transparent process of recapitalisation).”

There is also a special section for fighting humanitarian crisis. This new section is actually an admission of the failure of the previous program, despite that some representatives of the lenders' side and other big mainstream media are talking about a retreat of the Greek side. In essence, this is another tactical win by the Greek side:

“The Greek government affirms its plan to: Address needs arising from the recent rise in absolute poverty (inadequate access to nourishment, shelter, health services and basic energy provision) by means of highly targeted non-pecuniary measures (e.g. food stamps). Do so in a manner that is helpful to the reforming of public administration and the fight against bureaucracy/corruption (e.g. the issuance of a Citizen Smart Card that can be used as an ID card, in the Health System, as well as for gaining access to the food stamp program etc.). Evaluate the pilot Minimum Guaranteed Income scheme with a view to extending it nationwide. Ensure that its fight against the humanitarian crisis has no negative fiscal effect.”

The last "dark spot" sentence that “... its fight against the humanitarian crisis has no negative fiscal effect.”, has been added obviously to balance the concerns of the fanatic fiscal discipline sadists.

However, there are also some other “dark spots” in the list:

“Establish a closer link between pension contributions and income ...”

“Reform the public sector wage grid with a view to decompressing the wage distribution through productivity gains and appropriate recruitment policies without reducing the current wage floors but safeguarding that the public sector’s wage bill will not increase. Rationalise non-wage benefits, to reduce overall expenditure, ...”

“Commit not to roll back privatisations that have been completed. Where the tender process has been launched the government will respect the process, according to the law. [...] Review privatisations that have not yet been launched, with a view to improving the terms so as to maximise the state’s long term benefits, generate revenues, enhance competition in the local economies, promote national economic recovery, and stimulate long term growth prospects.”

“The scope and timing of changes to the minimum wage will be made in consultation with social partners and the European and international institutions, including the ILO, and take full account of advice from a new independent body on whether changes in wages are in line with productivity developments and competitiveness.”

“Greece remains committed to: Removing barriers to competition based on input from the OECD.”

In any case, the list is light-years away from the measures that the previous FinMin was about to implement (http://www.scribd.com/doc/253230785/Hardouvelis-email#scribd). The list is also written in a flexible way containing convenient generalities especially for the Greek government. It appears that this is indeed a four-month truce period which the two sides will seek to exploit for their own purposes. The Greek government should take the advantage for the next battle, exploiting this period and making fast and smart moves:

“... the financial lobbyists, represented by the Troika, insist in the final sadistic fiscal targets, exactly because they know that a devastated economy is impossible to meet them. They will use this four-month period only as an excuse to say later that they treated Greece with enough clemency against the other eurozone members and they will play this card to turn all the eurozone countries against Greece, in order to isolate fully the Greek government. On the other hand, Tsipras took what he wanted in order to prepare better for a Grexit. The Greek Leftists in power know very well who are dealing with, so they will use this time to prepare for the next battle of this big war.” (http://failedevolution.blogspot.gr/2015/02/german-retreat-gives-chance-for-greeks.html)


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