As troika returns, gov't seeks to win back voters ahead of May elections

With the troika due back in Athens on Sunday and local, as well as European Parliament, elections looming in May, the government is about to attempt to appease several disgruntled groups with a bill containing changes to the tax system.

Kathimerini understands that among other things the legislation will reduce the size of fines for individuals and firms having problems meeting their tax obligations and exempt homes that have been in the possession of owners for more than 25 years from capital gains tax for property.

Defense Minister Dimitris Avramopoulos also confirmed on Tuesday that members of the armed forces who receive a bonus for taking part in frontline duties will not see their benefits taxed. “The prime minister [Antonis Samaras] has given instructions to the relevant ministers for the legislation to be drawn up immediately,” said Avramopoulos.

There was also a meeting between Finance Ministry general secretary Haris Theoharis and New Democracy MPs to discuss the grievances of farmers, who are still protesting in some parts of Greece. Theoharis is thought to have agreed to make several changes that would ease the tax burden on those working in the agricultural sector. The conservative lawmakers are due to meet farmers today and it is likely they will demand a meeting with Finance Minister Yannis Stournaras as well.

All this comes just three months before Greeks vote in the local and European elections due to be held on May 18 and 25. The government is hoping to come away with a result that will not raise questions about its ability to see out its four-year term, as Samaras has insisted it will.

The troika could also play a significant role in the government’s prospects, particularly when it comes to debt relief. However, this issue will be firmly off the table when representatives of Greece’s lenders return to Athens on Sunday. Talks between the two sides are due to resume on Monday with the aim of concluding the review of the Greek program by the March 10 Eurogroup so eurozone finance ministers can agree to the disbursement of almost 9 billion euros more in bailout funds.

Talks are expected to focus on the competition-enhancing measures Greece has been asked to adopt as well as the potential fiscal gap for 2015, which Athens estimates to be smaller than 1 billion euros, whereas the troika puts it closer to 2 billion.

Other outstanding issues are the reduction of social security contributions for employers by 3.9 percentage points, which has to be replaced by other revenue-raising measures, the abolishing of several parafiscal charges and the removal of restrictions to mass dismissals.