Eurozone finance ministers gather in Brussels on Wednesday evening to discuss proposals from Athens to secure a life-saving €7.2bn (£5.1bn) in financial aid. If these reforms receive ministerial approval and are passed by the national parliament in Athens, Greece will be able to pay a bill of €1.6bn that is owed to the International Monetary Fund by next Tuesday.

Taken from the 11-page document submitted by the government of Prime Minister Alexis Tsipras on Monday, these are the proposals:

Pension reform

What Greece is offering:

• Increasing national healthcare contributions – a levy paid by pensioners – to an average of 5% of pension income, up from 4%

• Introducing healthcare contributions for supplementary pensions, at a rate of 5%

• Raising social security contributions for supplementary pensions from 3% to 3.5%

• Increasing pension contributions for those working towards retirement by 3.9%.





Will it work?

These are clearly defined tax-raising measures that could generate large tax receipts for the Athens exchequer. The task will be to convince Greeks who will be hit hard by extra pension contributions, albeit via the health levy.

VAT

What Greece is offering:

•The standard rate of 23% will be widened

•However, “to protect the disposable income of low- and middle-income households” there will be a reduced rate of 13% on energy, basic foods, catering and hotels

• A reduced rate of 6% will be charged on medical supplies and books

• In order to “promote fairness”, VAT discounts for various Greek islands will end.

Will it work?

Higher rates for the islands are already generating protests. The higher VAT rates will do much of the heavy lifting in the new deal, raising the equivalent 0.74% of GDP, according to the document. This assumes the Greeks continue to consume at their current level, which could be over-optimistic if the economy remains in recession and the few still in employment fear for their jobs.

Corporate taxes

What Greece is offering:

• An increase in the corporation tax rate from 26% to 29% combined with a special tax of 12% on corporate profits above €500,000. The total tax raised should be €815m in 2015.

Will it work?

As with all taxes, there is an assumption that the taxpayer will hang around long enough to pay up. It could be that the prospect of a brighter future for Greece attracts foreign investment, or at the very least keeps businesses in the country and paying tax. But higher taxes and a tough next few years of recession could persuade international companies to leave Greece or force domestic firms out of business, denting the expected figure for extra income.

Additional measures

What Greece is offering:

•Supplementary income tax payments imposed under the previous bailout programmes are to be raised. A “solidarity supplement” that starts at 1% of income and rises to 3% in addition to standard income tax rates will go up in a “progressive” fashion to limit the impact on lower-income groups, raising €220m this year and €250m in 2015

•In 2015 there will be €200m more shaved off the defence budget

•Increase the tax on luxury recreational vessels (yachts) over 10 metres-long yachts from 10% to 13%, raising an extra €47m.

Will it work?

The higher solidarity supplement will hurt those in work, who must pay the higher rate. This could be difficult to get past the hardline Left Platform group of Syriza MPs, who will agree to defence cuts, but may not stomach a further tax on incomes.

They will agree with another strike at the defence budget, which had soared to the sixth largest in the world 10 years ago. It took some steep cuts, but is still comparatively large. A higher tax on yachts will also play well with Syriza parliamentarians.