Greece announced this week that it would not proceed with a planned VAT raise on certain holiday islands. The austerity measure has been agreed with major debtors of the country as part of a bail out programme stretching back to the Euro crisis.
In addition to the VAT increase delay, the government also announced a one-off payment to pensioners. The two measures have meant that creditors have reacted with a pause on short-term debt relief.
Greece raises VAT on island
From 1 January 2017, Greece had planned to withdraw the 30% VAT rate discount from the last group of holiday islands.
The islands included are: Lesvos, Chios, Samos and Kos.
The discount was given from the mainland standard VAT rate to help curtail reducing population rates on the remote islands. The standard VAT rate in Greece is 24% since June 2016.
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