DOCUMENT: Greeks return to original measures to meet demands

The Greek government returned to many of the original austerity measures to save money including cutting pensions, privatising airports and ports as well as new laws to tackle tax evasion and fraud.

Their last minute proposals, complete with details of how much each measure would save over the coming years, are being scrutinised by the European Commission, the ECB and the IMF to ensure they add up.

The details in the 11 page document means the prospect of the country going bankrupt and leaving the eurozone has been averted, at least for now, while it is expected to be finalised by EU leaders at their summit on Thursday.

Arriving for a special emergency summit last night, Taoiseach Enda Kenny said, “I’m happy to say there is some movement and it’s the start of a more detailed process”.

European Council president Donald Tusk, who chaired last night’s meeting, said it was not intended to decide whether to release the money or not, but to “end the political gambling”.

The EU leaders are gauging whether in fact the Greek prime minister, Alexis Tsipras, after four months of no progress is serious about introducing the changes, and whether he has enough political support to do so.

The proposals — that came first at midnight on Sunday to be replaced by a fresh set with minor changes yesterday morning — if accepted will release more than €7bn from the EU’s bailout fund in time to repay the IMF €1.6bn next Tuesday.

They include changes to pensions, Vat, employment laws, a new criminal law on tax evasion and fraud, privatisation of ports, airports and real estate to raise €6.3bn over three years and taxing undeclared wealth in Greek citizens’ bank accounts abroad.

Mr Tsipras promises a supplementary budget this year to ensure the books are balanced with 1% primary surplus, increasing over the coming years to 3.5% in 2018. The original demand was for 3.5% this year.

There will be a major simplification of the Vat system with two main rates of 23% and 13% and 6% for medical supplies and a system to collect the money where the state has largely failed so far.

Pensions are also being targeted with Greece spending 16% of GDP, the highest in the EU, mainly on public sector pensions. The aim is to cut this by 1% next year and increase the retirement age to 67 years by 2025.

A new income tax code is to be introduced, corporation tax to increase from 26% to 29%, while military spending is to be cut by €200m.

The overall positive approach by EU leaders was coloured by Michael Noonan and his German colleague Wolfgang Schäuble asked how long the ECB could continue to increase the amount of money they release to the Greek banks to keep them open.

ECB president Mario Draghi said that was an issue for him to deal with.