Economy minister comes in for flak

The prime minister is reportedly concerned by the Economy Ministry’s recent handling of issues such as a possible increase in value-added tax (VAT), the leveling of tax on heating fuel and diesel, the imposition of a single property tax and the revision of the gross domestic product (GDP). After spending a first term in office without any problems and actually strengthening his image, Economy Minister Giorgos Alogoskoufis just one month after the election appears to be increasingly prone to errors in judgment, his critics say. The first unfortunate move was the announcement of plans to level the special consumption tax on diesel and heating oil, without first deciding on the way consumers will be refunded with the difference. This created a public outcry and gave Greeks and Europeans alike the impression that the government has no comprehensive plan to combat tax evasion. Alogoskoufis is also under fire over the single property tax, as key issues have not yet been clarified, such as the tax-free ceiling for the main residence. The resulting confusion has also had an impact on the real estate market. The GDP revision was another bad moment for Alogoskoufis, who appeared to have no control over the procedure. Following a National Statistics Service announcement of a GDP increase of 25.7 percent, the minister appeared shocked by the massive difference with the final estimate by Eurostat. Finally, the minister is being held responsible for rumors of a possible rise in VAT rates. His statement on Wednesday lacked the usual phrase that «it is not in the government’s intention to raise VAT rates,» fueling speculation that this is precisely what it would do. Such a development would harm Alogoskoufis’s credibility. However, other officials point out that during his first term as minister, it was Alogoskoufis who made the thorny problem of the economy the government’s biggest achievement.