Gov't regroups in bid to push reforms ahead of troika talks

Members of the Cabinet are set to return to the capital this coming week, following a short vacation, to resume work on economic reforms pledged to the troika ahead of crucial negotiations with foreign creditors that are scheduled to take place early next month in Paris.

With the agenda of the Paris talks expected to focus on Greece’s progress in overhauling its economy, its relationship with the troika as well as the anticipated launch of negotiations to lighten the country’s huge debt burden, which stands at around 174 percent of gross domestic product, Greek government officials are keen to show international creditors that Athens has honored its commitments and met fiscal targets.

Prime Minister Antonis Samaras is understood to be eager to introduce tax breaks as an antidote to years of austerity measures and wants to overcome any likely objections by the troika to his plans by showing that Athens is toeing the line.

If the outcome of the negotiations in Paris is positive, Samaras hopes to present the proposed tax relief during his speech at the Thessaloniki International Fair (TIF), where premiers traditionally set out economic policy or offer pre-election handouts. This year, TIF is scheduled to run from September 6 to 14.

Allowing Greeks with debts to the state to repay their dues over a large number of installments is another sweetener that the government hopes to be able to offer.

Before it can make such overtures, however, it must press ahead with a rash of measures it has agreed to enforce as part of a revised memorandum accompanying the country’s second loan agreement with foreign creditors. These measures include an overhaul of civil servants’ salaries and a second phase of pension reform.

Another top priority for the government is to untangle the confusion caused by the proposal for a new unified property tax (ENFIA), which prompted an outcry after erroneous data used to calculate it resulted in disproportionate levies for thousands of homeowners. Among those objecting to the ENFIA were a large number of coalition MPs, many of whom called for the levy to be revoked.

The issue is expected to dominate the political agenda over the coming days as the first installment of the contentious tax is due to be imposed next month.