PM pledges no new taxes and backs bailout

Prime Minister Costas Karamanlis pledged yesterday not to introduce any new taxes as a result of the impacts of the global financial crisis, as he denied claims of opposition parties that he was «gifting» 28 billion euros to banks that will take part in the government’s bailout plan. In a parliamentary debate on the economy that probably left voters none the wiser about the details of the package that aims to provide some Greek banks with capital to help them keep afloat during this turbulent period, Karamanlis said that the deal was not just designed to help banks. «It aims to avert the problems that could be caused by a lack of liquidity and is designed to support borrowers, small business, investors and the public sector,» he said. The government was forced this week to stipulate that any banks taking part in the deal would have to limit the salaries and bonuses of top executives. The move came after the conditions of the 28-billion-euro package were criticized as being too lax. «You are persisting with the same line of attack, which means you are either ignorant or keen to spread inaccuracies or lies deliberately,» Karamanlis told PASOK as he denied the bailout was a «gift» to the banks. PASOK leader George Papandreou appeared unconvinced. «Major shareholders in these banks should also be putting their hands in their pockets,» he said. «This draft law is a crime against the people as a whole. We are opposed to something that serves interests and your dependencies.» The Socialists have not been the only critics of the government’s plans. The head of Greece’s biggest buyout consortium, Marfin Investment Group, Andreas Vgenopoulos, also said this week he thought the ideas had been poorly thought through. The prime minister went on to suggest that any profit made by the government from banks taking part in the scheme would be plowed back into public investments and a social cohesion fund that provides assistance to the unemployed and low-income workers. The government is hoping that at a meeting of European Union finance ministers due next week, Greece will be given some leeway over its public deficit, which is above the 3 percent of GDP threshold. Nevertheless, Karamanlis insisted yesterday that he does not plan any taxation changes. «There are not going to be any new taxes,» he said.