NEWS

Finance Ministry challenges SYRIZA's economic pledges

The Finance Ministry responded on Tuesday to SYRIZA’s economic program by saying that it would cost several billion euros more than what the opposition party claims and would lead to Greece’s public deficit increasing by around 9 percentage points.

A document issued by the ministry suggests that the leftists have underestimated the cost of numerous pledges made by opposition leader Alexis Tsipras at the Thessaloniki International Fair (TIF). The ministry said, for example, that SYRIZA had failed to incorporate the 4 billion euros it would cost to increase the Public Investment Program. The government also estimates that raising the tax-free threshold on incomes to 12,000 euros would cost 2.5 billion euros, rather than the 1.5 billion SYRIZA projects. Finance Ministry officials also believe that giving an extra 300,000 unemployed Greeks benefits and raising the minimum wage to 751 euros would cost 1.4 billion euros, whereas SYRIZA believes it would be fiscally neutral.

All in all, the government estimated that SYRIZA’s program would cost 17.2 billion euros, in contrast to the total cost of 11.4 billion announced by the leftists. The ministry added that if SYRIZA proceeds with its plans to write off the bank debts of those living in poverty, the cost would be even greater. SYRIZA believes such a measure would result in losses of around 2 billion euros but the government puts this at closer to 10 billion.

The Finance Ministry also casts doubt on SYRIZA’s plans to raise revenues from settling tax arrears and more intense efforts to stamp out tax evasion. The government believes that an extra 14 billion euros in revenues would be needed at a time when Greece’s borrowing costs might rise, meaning the program could increase the deficit, “leading the country back into fiscal crisis.”

SYRIZA is expected to respond to the ministry’s calculations on Wednesday but party sources suggested on Tuesday that the document was an indication about how worried the coalition is about the leftist party’s rise.

Speaking on Vima FM, SYRIZA’s chief economic policy spokesman Yiannis Dragasakis insisted that the leftists would run a balanced budget. “We are not going to return to deficits,” he said

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