NEWS

In first troika meeting, Greece proposes pilot scheme to reduce VAT at eateries

The heads of the troika team in Athens met with Finance Ministry officials on Monday, the first meeting between the two sides since the International Monetary Fund admitted serious mistakes in the handling of the first Greek bailout.

A range of issues were on the table as the latest quarterly review of the Greek fiscal adjustment program began. Finance Ministry sources said that the Greek side raised the possibility of reducing VAT in the food service sector on a pilot basis.

The government has long wanted to drop VAT at restaurants from 23 percent to 13 percent but the troika has resisted this proposal because of concerns about a drop in revenues.

Greece argues that lower prices would encourage more customers, especially during the tourism season, and revenues would be higher. Athens appears to have proposed that a 6-month reduction be introduced to test the waters.

Troika officials – Paul Thomsen of the IMF, Mathias Mors of the European Commission and Klaus Masuch of the European Central Bank – are due to meet Administrative Reform Minister Antonis Manitakis.

A number of structural reforms, such as the firing of civil servants and the reorganization of ministries, fall under Manitakis’s authority.