Greece unveiled draft legislation on Sunday intended to provide relief to millions of Greeks with tax and pension contribution arrears, offering discounts to amounts owed and stretching out payment plans by up to 120 monthly installments.
The country’s leftist government, trailing the conservative opposition in opinion polls before national elections due in the autumn, is keen to show its social sensitivity to those facing difficulty paying their accumulated dues.
“Our plan helps those who are struggling to pay but cannot. We have been through the biggest crisis seen in a capitalist country; they don’t have the liquidity (to pay),” Finance Minister Euclid Tsakalotos told reporters.
He said that about 4.2 million people have unsettled arrears with the tax office, state pension funds and municipalities, including about 80,000 eligible for retirement pensions but unable to receive benefits because of their arrears.
The bill, coming weeks before European Union elections this month, will be submitted to parliament on Monday.
It offers discounts 65 percent of arrears including surcharges, plus minimum monthly repayments of 50 euros, depending on annual income and other criteria.
Greece, which emerged from its third international bailout in August last year, has been outperforming fiscal targets agreed with its international lenders.
Last year it achieved a primary budget surplus of 4.3 percent of economic output, beating its 3.5 percent target – the fourth consecutive year of outperformance.
Athens has committed to deliver primary budget surpluses, excluding debt servicing, of 3.5 percent of annual economic output up to 2022.
The larger than targeted surplus gives the government leeway to proceed with handouts in an election year and possibly negotiate with lenders to trim targets for budget cuts in the coming years.