Greece's creditors make new compromise proposal

On Friday Greece's creditors came up with yet another proposal before the Saturday deadline

Greece's creditors make new compromise proposal

World Bulletin / News Desk

In a surprise move, Greece's creditors have made a new compromise proposal Friday.

A leaked document makes significant changes to bring the negotiating positions of creditors closer to that of the Greek government.

Major concessions have been made on pension reforms. A Greek government program which gives extra money to poorer pensioners was to be scrapped, according to Athens' proposal, by 2020.

Creditors had asked that it be ended by 2017 but now they are willing to wait until 2019. The creditor proposal also permits raising the contributions pensioners must make towards healthcare from 4 percent to 6 percent, which was another Greek government demand.

Major concessions have been made on value-added tax as well. Creditors have now accepted the Greek government proposal of a three separate VAT rates, including a low rate of 6 percent for pharmaceuticals, books and the theater which creditors had previously rejected. Creditors have also accepted a 13 percent VAT rate on electricity, which they had refused before.

The new offer from creditors also accepts an increased corporate tax rate of 28 percent, close to the Greek government proposal of 29 percent.

The new proposals will be considered in an emergency Eurogroup meeting today but informal negotiations will continue as a Saturday deadline approaches. 

Greece needs the next 7.2-billion-euro ($8.2 billion) tranche of bailout funds to make its $2 billion in payments to the International Monetary Fund by the end of June.

Should a deal be reached Friday or Saturday, both the Greek parliament and eurozone parliaments must still ratify the deal.

Güncelleme Tarihi: 26 Haziran 2015, 10:28