Greek VAT delay blocks €15bn bailout funding
The Greek decision last week to extend the discounted VAT rates till January 2019 on five islands impacted by the refugee crisis has led to a delay in the €15bn last round of bail out funding. Greece has failed to consult with its creditors on the move. The islands are: Lesvos, Chios, Samos, Kos and Leros.
The rise in the standard Greek VAT rate of 23% on the islands – which currently enjoy a 30% discount – was linked to the long-running Euro-crisis €86bn bailout from the EU, IMF and European Central Bank. German representatives at the EU highlighted that the continuing tax subsidy would leave a €28m hole in the Greek budget. In return, Greece has committed to looking for savings in other areas, including defence.
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