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Situation in Greece

Greek parliament to vote on set of reforms needed for new bailout deal

The government needs support of the opposition to adopt the law

© EPA/ALEXANDROS VLACHOS

ATHENS, July 22. /TASS/. The Greek parliament will vote Wednesday on a second package of reforms required to secure its third bailout deal. The set of measures includes financial and judicial reforms. The bailout deal at stake is worth 86 billion euros for three years.

The government hopes to complete negotiations on the new bailout by August 20.

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Parliament voting will become another challenge for the government of Alexis Tsipras, whose ruling party Syriza lost support of its 39 deputies during voting on July 16. This means that the government is relying on the minority in the parliament (less than 150 votes out of 300) and needs support of the opposition to adopt the law.

Banks reopened in Greece on Monday and VAT (value-added tax) for many products and services will increase as creditors are providing bridge financing to Athens, part of which will immediately go for repaying the loan to the European Central Bank.

The National Confederation of Hellenic Commerce (ESEE) told TASS that "additional direct and indirect taxes will stand at around 4 billion euros in 2016, though in 2015 they will be less." "Only increasing VAT will bring 785 million euros in 2015 and 2.39 billion euros in the next year," ESEE said.

VAT on public transportation, taxi, plane and ship fares will grow from 13 to 23%, along with restaurants and catering services. VAT on electricity, water and several types of products will be set at 13% Taxes for hotels will be increased from 6.5 to 13% starting in October, after the tourist season.

The financial situation in Greece remains unstable. Greece will receive 7 billion euros approved on Friday by creditors in the framework of bridge financing program. A total of 3.5 billion euros will be used to repay the loan to the European Central Bank, another 2 billion euros - to International Monetary Fund. The remaining funds will help the country survive through the period of talks on the new three-year credit program worth around 86 billion euros.

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