The Greek government controversially brought forward a parliamentary debate on the bailout conditions package of pension and tax rate and collection changes to special sessions over the weekend, causing mass protests and strikes across Greece.
The General Confederation of Employees of Greece (GSEE) — the largest trade union body representing 83 unions — and the civil servants' union federation ADEDY accused the government of a carrying out a "parliamentary coup" by speeding up the controversial legislation, demanded of it as part of the Greek bailout scheme.
The third bailout austerity measures have proved deeply unpopular in Greece, with many demonstrations and rising street crime. The reforms included "streamlining the VAT system and broadening the tax base to increase revenue" and "up-front measures to improve long-term sustainability of the pension system as part of a comprehensive pension reform program."
There are also divisions within the Troika with the IMF refusing to take part in the third Greek bailout, saying that the terms demanded by the EU are "unsustainable" and that Greece should be allowed debt relief — the writing-off of part of its debts — in the same way as Germany was allowed it following the end of the Second World War.
Wheels up for Brussels. Eurogroup on Greece. Looking for common solutions to common problems on #EuropeDay2016.— Alexander Stubb (@alexstubb) May 9, 2016
The IMF is facing a backlash from its own executive, as remaining party to the bailout program is in breach of its own policy of not lending money to insolvent governments.
However, there is also disagreement over extra reforms demanded by the IMF that could amount to another US$4 billion in cuts by Greece, over and above what it has already promised.
Interested in today's Eurogroup on Greece with the IMF and Berlin tussling over Greece's debt & fiscal targets?https://t.co/f94L5NoXVr— Yanis Varoufakis (@yanisvaroufakis) May 9, 2016
The latest measures agreed by parliament include reducing pension spending by about two percentage points to around 15 percent of GDP by 2019; setting social security contributions at 20 percent of employees' net monthly income — with 13.3 percent coming from employers and 6.7 percent from employees; and lowering the income tax-free threshold, or personal allowance, to an average of around US$10,000 a year from around US$10,800 and making income bands narrower.