ATHENS: Greek Prime Minister Antonis Samaras has said he had rejected calls from the EU and IMF to raise taxes to satisfy the demands of the country’s bailout programme.
Samaras denied reports in the Kathimerini newspaper that his government was planning a fresh tax hike to close a crucial European Union-International Monetary Fund audit that will determine the future of the bailout.
“Now that we are approaching the final audit of the aid programme, which expires at the end of December, there are conditions concerning tax rises and the reduction of revenues. I say clearly, we have rejected these calls,” Samaras said at an economic conference at the Greek-American Chamber of Commerce. He criticised the “heavy pressure” that the troika of creditors – the European Union, the International Monetary Fund and the European Central Bank – had exerted on Greece, and insisted that his country would meet its budget goals without having to take the new measures demanded.
He admitted that “extraordinary measures” could be taken if there was a fiscal shortage in 2015. The Kathimerini report said Athens was offering to double hotel tax to 13 percent, a measure that runs contrary to Greek efforts to maximise tourism proceeds to help the country’s crisis-stricken economy recover.
It also claimed Greece was offering to tighten rules on early retirement, and could increase tax on alcohol andtobacco if necessary. The talks with the creditors will permit the disbursement of pending loans for Greece, but also determine how the cash-strapped country will cover its financing needs over the coming year.
The EU financing programme ends in December, and Greece had hoped to dispense with the IMF’s remaining loans – which come with tight budgetary regulations – that run to 2016. But after four years of crisis, borrowing rates for Greece on financial markets remain prohibitive. The troika estimates that Greece must save between two and three billion euros ($2.5-3.7 billion) in 2015 to meet its primary surplus target of 3.0 percent of economic output. But the Greek government sees this figure as excessively high. Greece is set to receive another 1.8 billion euros from the EU by December. Another 12.6 billion euros remain to be disbursed by the IMF by 2016.