With the country expected to kick into pre-election gear after September, the government is planning measures to ease the pressure on the middle classes in a frantic bid to bridge the gap with opposition conservatives in the opinion polls and to show that the Greek economy has indeed turned a corner.
More specifically, a meeting on Tuesday of ruling SYRIZA’s political council discussed how to use a 700-million-euro primary surplus which will be included in the 2019 budget to implement targeted tax breaks for the middle classes, which have arguably borne the brunt of Greece’s protracted financial crisis.
To this end, the government’s financial teams are reportedly already examining a series of tax relief measures which Prime Minister Alexis Tsipras plans to announce at the Thessaloniki International Fair (TIF) in September, which will coincide with the beginning of the pre-election period – with polls either in May, along with local and European elections, or in September 2019.
The council discussed the idea of modifying tax scales rather than slashing value-added taxes and the highly unpopular ENFIA property tax, as the latter two would come up against the objections of Greece’s creditors and have a horizontal impact rather than targeting the middle classes.
So far the government had focused its efforts on the poorest members of society with one-off bonuses drawn from recent surpluses, and it is expected to continue doing so.
But with a new tax storm looming as the country prepares to exit its third and final bailout program next month, there was consensus at Tuesday’s political council meeting that it is high time that middle-class citizens felt the benefits of the economic upturn the government has been preaching “in their pockets.”