NEWS

Greek coalition leaders reach compromise on property tax as troika returns

A few hours before talks with the troika were due to resume, Greece’s coalition leaders overcame on Wednesday night initial disagreement to reach a compromise on the makeup of a property tax deemed vital to meeting the revenue targets set by the country’s lenders.

After talks late Wednesday with Prime Minister Antonis Samaras and PASOK chief Evangelos Venizelos, Democratic Left leader Fotis Kouvelis said that the coalition would approach the troika with a “common position that the emergency property tax be replaced with a new unified property tax.”

His party had been vehemently opposed to extending an unpopular emergency property tax introduced in 2011 and levied via electricity bills.

The new tax would also be attached to electricity bills but only for this year, Kouvelis said. Tax offices will be responsible for collecting the levy from next year.

The new levy will combine all property taxes and could lead to some owners paying less overall. Kouvelis added that the tax would be levied on a wider property base, including farmland.

Finance Minister Yannis Stournaras told reporters that the government would propose to the troika changes to the charges faced by property owners. Venizelos suggested that a tax-free threshold might be introduced. However it was not clear late Wednesday which of these two options the government would choose.

The troika is due to begin its latest visit to Greece by holding talks with Stournaras on Thursday. It will be the first chance for the two sides to re-examine several issues that have remained unresolved since European Central Bank, European Commission and International Monetary Fund officials left Athens in March.

These include the reduction of the number of civil servants, with 25,000 workers expected to enter a mobility scheme this year.

Also, the recapitalization of Greek banks has yet to be completed, with the troika harboring doubts about the merger between National Bank and Eurobank. There will also be discussions about how many installments Greeks should be allowed to pay off their overdue taxes.

Kathimerini understands that the two sides hope to conclude talks by April 16 so that the Eurogroup can then decided whether to approve the delayed March tranche of 2.8 billion euros and the next installment of 6 billion euros.