Solidarity levy worries government

Solidarity levy worries government

The government will find it hard to expand the suspension of the solidarity levy next year – as it currently applies to the private sector – to civil servants and pensioners as this would require extra fiscal leeway of some 400 million euros, according to Finance Ministry sources.

Indicative of the dilemma facing the government is the fact that in its recent Spring Forecasts the European Commission spoke only of the measure applying to the private sector, at a cost of some €800 million.

The government is determined to fight for the measure’s expansion, as the political gains would far from negligible, and any decisions will be made in September or October. 

The suspension of the levy amounts to the easing of the tax burden by up to €676 per year for annual incomes of €30,000.

The fiscal space is very tight, and the extension of the general opt-out of the Stability Pact into next year that Brussels is expected to propose on Monday to eurozone finance ministers will not have any major bearing on conditions for Greece, as the country remains in the category of overindebted member-states.

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