Greek banks open but payments still limited

Bailout costing Greek agriculture 2 billion euros

Greece has paid more than 2 billion euros back to the IMF, thereby clearing its debt. In addition to paying back the IMF, Greece also started paying back the ECB. Last Monday (July 20, 2015) the banks reopened, although payments are still limited, and new VAT rates were introduced in a hurry. 

As of this week the VAT has increased on many products; in some places to as high as 23%. The new rules are being questioned by entrepreneurs. A grocery store employee told the New York Times that he had no idea which products fall under which tariff. For now it seems only meat and fruits and vegetables are being spared from the tax increase. 




Additionally, there are entrepreneurs that have not yet passed on the price increase to their customers. One restaurant owner told the New York times that they are absorbing the VAT increase themselves. In 2011 the VAT for restaurants increased temporarily to 23%, at the time many restaurant owners also absorbed the loss. The result here was that the these companies could not pay the tax themselves and had to deal with the consequences. 

The payment system is still limited. Greeks can still only withdraw a maximum of 60 euros per day, but due to the fact that the banks have reopened it is now possible to withdraw the 420 euros for the whole week in one day. 

The Greek agriculture organization PASEGES calculated that the agreement that Greece made last week with creditors will cost the sector more than 2 billion euros, this information is based on European data. The cost increase is primarily due to higher tax measures, a loss in the tax-break on fuel and higher insurance premiums. Nevertheless, the President of the association is convinced that the deal is better than no deal, "The Greek agriculture sector needs political stability right now and a reform of production and a new strategic plan, developed together with the cooperatives and institutions of this country."

The money that Greece is repaying to the IMF and ECB is from the 7.6 billion euro emergency loan that Europe promised last Friday (July 17, 2015). 


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