NEWS

Property tax splits coalition ahead of troika visit

As Prime Minister Antonis Samaras and his coalition partners, PASOK leader Evangelos Venizelos and Fotis Kouvelis of Democratic Left, prepare to meet at 7 p.m. on Wednesday for talks aimed at forging a united front in negotiations with troika envoys, who return to Athens on Thursday, the three parties in the government appeared to be in disagreement about a controversial property tax.

The Finance Ministry and conservative New Democracy, which leads the coalition, continue to insist that the tax, introduced in September 2011 as an emergency levy attached to electricity bills, be extended for another year to clinch some 2 billion euros in much-needed revenue. But Democratic Left is adamant that the government should not renege on its original promise to replace the levy with a unified property tax. Although less adamant than Democratic Left, which has threatened to vote against the extension of the property tax in Parliament, PASOK also wants the levy to be substituted with “a fairer tax.”

Sources indicated that Venizelos aims to raise the issue in the talks as well as calling for a revision of the coalition’s policy program and for a cabinet reshuffle. PASOK officials point to a lack of progress in several key ministries – notably the development and interior portfolios. Venizelos is also expected to call for support for indebted households.

Democratic Left’s Kouvelis will probably be an even tougher customer due to his apparently unbending line on the property tax. He is expected to insist that plans for a unified property tax be completed and introduced by the summer and is likely to echo the conviction expressed by members of his party that Greeks will simply stop paying the property levy if it is extended.

Sources close to Samaras were reportedly rankled by the fact that the two coalition partners appeared to be competing with each other in displaying social sensitivity rather than backing efforts to push through reforms pledged to creditors to secure a 2.8-billion-euro tranche of rescue aid for March. New Democracy officials were also reportedly put out over a meeting on Tuesday between Democratic Left and PASOK officials.