Stournaras denies plan to cut heating oil tax

Finance Minister Yannis Stournaras on Monday hit back at claims that the government intends to reduce the heating oil tax amid a clamor from within New Democracy and PASOK ranks for the coalition to adopt some popular policies when Prime Minister Antonis Samaras delivers the keynote speech at the Thessaloniki International Fair on Saturday.

Stournaras spoke to Kathimerini to clarify that there would be no move to reduce heating oil tax after MPs from New Democracy and PASOK had created a whirlwind of speculation about the measure. “This is not the time to reduce taxes,” he said. “We have not achieved a primary surplus yet. We are on the right track but we are some distance from the final target. It would be wrong to bring this issue up now. This is the government’s position, as set out by the prime minister and the Finance Ministry.”

Stournaras’s rebuttal, which had been cleared by Samaras, came as the Finance Ministry announced a 2.6-billion-euro primary surplus in the general government budget for the first seven months of the year. Also, Stournaras stood by last year’s measure of pushing up tax on heating oil to the same level as for vehicle fuel even though revenues from fuel tax were 300 million euros lower than a year earlier.

The government believes that this was partly due to people stocking up on heating fuel before the tax rise and a relatively warm winter. The ministry has also seen signs that the tax hike achieved one of its intended goals, which was to tackle smuggling.

“The special consumption taxes on heating oil and vehicle fuel were unified to combat smuggling,” said Stournaras. “If we reduce the heating oil tax, we will give smugglers a window of opportunity. We can look at simplifying the process for those claiming subsidies but not reducing the tax.”

Ahead of the premier’s speech in Thessaloniki this weekend and the scheduled return of the troika later this month, the main leftist opposition SYRIZA is increasing the pressure on the government. The party’s central committee, which convened over the weekend, reportedly decided to boost the party’s efforts in two directions – toward abolishing Greece’s loan agreements, or memorandums, and toward pushing the government to collapse.

Over the past few weeks, SYRIZA has called for a moratorium on Greece paying interest on its foreign loans and has supported the causes of school teachers, hospital workers and other civil servants.

The pressure on the government is being compounded by Democratic Left (DIMAR), which quit the three-party coalition in June after Samaras shut down state broadcaster ERT, and which appears to have shifted to the left. Recent statements by the party call for a reduction of Greece’s debt, compared to previous calls for a lightening of the burden or a restructuring.

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