Clear case of ‘fiscal panic’

The government’s tax measures contain some positive elements. For example, the abolition of the tax-free limit, which could strike a blow against tax evasion. It shows that Prime Minister Costas Karamanlis, despite his narrow majority, is willing to clash with vested interests, even if they are affiliated with the government. But that is only half the truth. The other half has to do with the patently obvious failure of the prime minister’s economic policy so far. Finance and Economy Minister Giorgos Alogoskoufis has failed abysmally to place fiscal control mechanisms on a new footing and stamp out tax evasion. The minister himself, along with his Cabinet colleagues, has not been able to curb spending or curtail the unbelievable waste of public funds. Unfortunately, the measures announced by Alogoskoufis are not the product of long months of planning but were arrived at in a state of fiscal panic, which has been brought about by the mistakes made by the government’s economic team.