Government to reevaluate austerity drive

Minister heralds revoking cuts for police and military as source reveals a tax relief plan is in the works

The government is planning to revise some of its economic policies, chiefly a series of taxes, in a drive that will not undermine troika-imposed policies and is slated for next year, Kathimerini has learned.

Meanwhile, faced with a minor revolt within the coalition after several MPs threatened to vote down an amendment revoking cuts to judges’ salaries and pensions, Alternate Finance Minister Christos Staikouras said similar action would be taken for police and armed forces staff who suffered cuts to their income as part of a troika-mandated austerity plan.

“There will be adjustments in due course,” Staikouras told Parliament shortly before a legislative amendment restoring the salaries and pensions of judges to pre-crisis levels was approved. He did not specify the size of the sum that would be required, noting that the ruling ordering the revocation of salary cuts for police and armed forces staff was taken this year and so has not been budgeted for. Sources indicated, however, that some 650 million euros will be necessary.

Staikouras said the government would “examine ways to cover the fiscal gap that will invariably be created” by the cash it will be obliged to pay out.

This gap is likely to grow as civil servants from other sectors have also been vindicated in court while others are preparing appeals. Hospital doctors said they were planning legal action against cuts to their incomes. Dimitris Varnavas, the head of the Federation of Greek Hospital Doctors, known by its Greek acronym OENGE, told Kathimerini that medics have lost 40 percent of their income since the onset of Greece’s financial crisis. OENGE is seeking to coordinate local unions across the country with the aim of submitting their appeals to courts of first instance and then to the Council of State, the country’s highest administrative court.

The additional pressures on Greece’s limited finances come amid indications that the government is preparing a tax relief package to offset the impact of years of austerity, according to a top-ranking Finance Ministry official who said the reforms would be enforced from 2015 onward and would not involve Athens reneging on pledges to the troika. Existing levies set to be revised include a special tax on heating fuel and a unified property tax, the official said.