ECONOMY

Athens proposes bank charge again

athens-proposes-bank-charge-again

The government has brought its proposal for a levy on bank transactions back to the negotiating table with its creditors in an effort to cover part of the fiscal gap expected up to 2018. However, the creditors have already expressed their opposition to such a measure, while there has been reaction within Greece too, as many believe this is not the right time for such a move.

Sources say that talks in the last few days between the government and the chiefs of the creditors’ mission to Greece have included a proposal by Athens for a small charge on bank transactions above a certain level so as to help the budget meet its targets.

This comes as the government needs to identify measures worth 3 percent of the gross domestic product, or 5.5 billion euros, up to 2018. Some 1.8 billion is to come from the social security system reform, another 1.8 billion from income taxation changes, and the rest from other interventions.

It is in the context of these other measures that the government has proposed a bank transaction charge. People familiar with the content of the talks say that the government does not have that many options in this bracket of measures, hence its attempt to return an idea previously rejected by the creditors.

The mission chiefs again expressed opposition on the grounds of the possible blow that would deal to the banking system just as it has successfully completed its recapitalization.

On Tuesday Finance Minister Euclid Tsakalotos held a long meeting with the creditors regarding the new, expanded privatization fund to replace TAIPED. The sticking point appeared to be how the real estate property of the state and the utilities would be transferred to the so-called “hyperfund.”

Meanwhile, the Labor Ministry will try to bridge the gap between the government and the creditors on the social security issue, starting at a meeting minister Giorgos Katrougalos will have with the mission chiefs on Wednesday, and putting aside for now the thorny issue of pension reductions. Although the distance between the two sides remains significant, the minister is optimistic about the course of the talks.