New Greek reforms will have no fiscal impact, says FinMin


New reforms to pensions and income tax that Greece will have to undertake to qualify for more loans will have no “net” fiscal impact, its finance minister said on Thursday.

The minister, Euclid Tsakalotos, told Parliament the “basic parameters”of the agreement with its international lenders brokered on Monday were already broadly known. He did not elaborate any further.

Athens and its creditors – eurozone member states and the International Monetary Fund – agreed on Monday to resume talks on Greece's long-stalled bailout review, but only after Greece accepted to examine reforms for 2019 onwards.

Tsakalotos's comments confirmed remarks by Greek officials earlier this week that the reforms would be “fiscally neutral.”

“Even though you may have expected us to take two, or four, or six or eight measures, there will not be a net fiscal impact,” Tsakalotos told opposition lawmakers.

“Some may lose out, but some will gain. Some whom we do not assist at present – and we should help them – will gain,” he said.

Tsakalotos said the government would do all it could to ensure that taxpayers who suffered a bigger hit would get something in return.

Lenders, who are extending a credit line of 86 billion euros to Athens, need to sign off on a review of bailout progress before releasing fresh funds. They have repeatedly expressed misgivings over a lopsided tax system where a small pool of taxpayers is supporting a growing contingent of pensioners.

Greece is edging closer towards reducing its tax-free threshold, which currently stands at 8,600 euros per annum, and pension reforms in return for tax breaks on property taxes and VAT, according to government officials.

“We never said the tax system (we have had) for 40 years was the best,” Tsakalotos said.