Prime Minister Antonis Samaras intends to herald a raft of tax relief measures during his speech at the Thessaloniki International Fair (TIF) on Saturday morning despite the fact that troika representatives meeting with government officials in Paris had not given their approval for such concessions by late on Thursday night, Kathimerini understands.
A statement issued by the troika on Thursday referred to “productive discussions” with Greek officials. But the issues raised in the talks – including fiscal adjustment, labor reforms and a civil service overhaul – are to be continued when foreign auditors return to Athens later this month for their next review.
A key bone of contention is the fiscal gap for next year – which the government estimates at 900 million euros but the troika puts at 2 billion, and the ways the gap will be bridged. The matter is to be a key focus of discussion in the coming days as government officials begin preparing the draft budget for 2015, which must be submitted to Parliament by October 6.
The question of Greece’s funding needs, and the sustainability of its debt, are to be on the agenda of a meeting with troika representatives in Washington in mid-November, according to reports which indicated that the International Monetary Fund had proposed the initiative though there was no official confirmation on Thursday that such a meeting is on the cards.
Despite failing to secure the green light from the troika, Samaras is said to be set on pressing forward with his goal of heralding tax relief unilaterally, sources indicated. In his speech opening the TIF on Saturday, he is expected to announce a 30 percent reduction to a consumption tax on heating oil and a 50 percent cut in a solidarity levy on income. He is also expected to unveil changes to a new single property tax (ENFIA) which had caused an uproar when it was first introduced as the use of erroneous data had resulted in thousands of homeowners facing tax bills 10 times the size of last year’s.
The new revised ENFIA, which will also include discounts for owners of unleased rental properties and properties that lack electricity, is to be submitted in Parliament on Monday.
In addition, Samaras is expected to announce that outstanding tax or social security debts can be paid in up to 100 installments.
Although the focus of his speech will be the much-vaunted tax breaks, the premier is expected to also outline a long-term plan for boosting growth and creating jobs and for overhauling institutions with a revision of the Constitution believed to be slated for 2021.
By presenting a series of sweeteners, Samaras aims to show that the government is sensitive to the plight of austerity-weary citizens, sources said. Also, government officials deemed that an announcement of this kind is justified in view of the government’s better-than-expected performance in revenue collection this year.
The apparent surge of the main leftist opposition SYRIZA in recent opinion polls is also a serious concern, particularly in view of the leftists’ stated intention to force early general elections next year by blocking the coalition’s candidate for president.
Before Samaras’ scheduled return to Greece, he is expected to meet on Friday with Turkish President Recep Tayyip Erdogan on the sidelines of a NATO summit in Newport, south Wales, where the crisis in Ukraine is the key topic on the agenda. Erdogan’s recent provocative comments on Cyprus are expected to make for a tense encounter.