Greece presented new reform proposals on Monday which its euro zone partners cautiously welcomed as a possible basis for an agreement to unlock bailout funds needed to avert a possible debt default.

Here is a summary of the proposal as spelled out by Greek government officials.

Pensions

• Early retirement to be curbed gradually from 2016 to 2025, but exemptions for some specific categories to be maintained, including for arduous professions and mothers with disabilities.
• A special benefit for some low-income pensioners, amounting to between €57 to €230 euros a month to remain but to be replaced from 2020 by new protection framework for low pensions. This is a key point of friction between Greece and its lenders, who wanted it scrapped.

VAT

• Greece to keep three value added tax rates of 23 per cent, 13 per cent and 6 percent. Electricity and restaurants to be taxed at 13 per cent instead of being raised to 23 percent, as lenders had demanded, while medicines to be cut to 6 per cent rather than raised to 11 per cent as sought by lenders. Officials said lenders were asking for two rates of 11 per cent and 23 per cent.

Tax hike for high earners

• Solidarity tax for higher income earners (earnings above €50,000) to be increased, while lowering the tax for revenues below €30,000 . It introduces a solidarity tax of 8 per cent on earnings above €500,000 .

Corporate and luxury tax hikes

• Tax plans to include: a) a special levy of 12 per cent on businesses that post a profit of over €500,000 euros; b) increases in luxury tax on pools, planes, big cars and private boats over 10 metres; c) a tax on gambling slot machines .

Privatisations

• Privatisations to impose a minimum amount of investment, a commitment by investors to promote the local economy and a participation of public equity.
• The transfer of Greece's state equity in Greek telecoms operator to the country's privatisation agency will not be part of the lenders' prior actions.
• Greece will not privatise its power grid operator (ADMIE) nor its dominant power utility PPC, as requested by creditors.

Public sector wages

• No cuts to public sector wages from levels at end of 2014.

Spending cuts

• Cut defence spending by €200 million.

Primary budget surplus

• Primary budget surplus of 1 per cent in 2015 and 2 per cent in 2016, compared with 3 per cent and 4.5 per cent agreed to by previous Greek governments.

Bonds

• Greece repeated demand for euro zone to lend it money to buy back €27 billion euros of its bonds from European Central Bank – effectively rolling-over the debt on more favourable terms.

Investment

• Greece wants deal to include financing of infrastructure and new technologies through an investment package from the European Commission and the European Investment Bank.

Targets

Greece plans fiscal measures worth €7.9 billion euros over 2015 and 2016. According to a planning document published by Greek daily Kathimerini, the main measures break down as follows.

2015 - 2016 schedule

• VAT reforms €680m rising to €1.36bn

Pensions

• Early retirement accruals: €60m rising to €300m
• Increase main contributions by 3.9 per cent €350m rising to €800m
• Increase pensioner health contributions from standard 4 per cent to 5 per cent: €135m rising to €270m
• Increase pensioner supplementary health contributions from 0 to 5 per cent: €240m
• Increase contribution for supplementary funds from 3 per cent to 3.5 per cent: €120m to €250m

Corporate and income tax

• Special 12 per centt levy on companies with profits above €500,000: €945m falling to €405m
• Raise top-rate corporate tax from 26 per cent t to 29 per cent: €0 to €410m
• Increase solidarity levy: €220m rising to €250m

Other measures

• TV advertising tax stays at €100m
• Luxury goods tax stays at €47m
• Electronic gambling tax: €35m rising to €225m
• Sale of 4G, 5G phone licences: €0 rising to €350m

- Reuters