With envoys from international lenders set to hit Athens on April 4, Greek Prime Minister Antonis Samaras has agreed to a compromise plan proposed by his coalition partners that would roll a 100 percent property tax surcharge into a unified single bill.
After talks last night with PASOK Socialist chief Evangelos Venizelos, and Democratic Left (DIMAR) leader Fotis Kouvelis, it was agreed that the coalition would approach the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-eCB) with a common front.
Kouvelis, who has relented to Samaras previously, said his party would not support extending the so-called dreaded “haratsi” tax that was levied in 2011 when Venizelos was finance minister and was supposed to be for one year only. The government said it badly needs the 2 billion euros ($2.6 billion) that the double tax brings in.
ENet reported that Venizelos said, “When it was agreed to introduce (the emergency property tax) in 2011 as a temporary and emergency measure, there was no other solution. As we said from the beginning, it was exceptional and temporary and now we must move on to a single progressive property tax.”
Samaras had not wanted to make any changes to the levy method and gained a partial concession when Kouvelis agreed to let it be attached again this to electric bills under the threat of having power turned off for non-payment, although a number of government offices haven’t paid it and their power has not been cut, earlier media reports said.
If the Troika agrees, starting in 2014 it will be up to tax offices to collect the levies, not the utility company. 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 Yiannis Stournaras told reporters that the government would propose to the Troika changes to the charges faced by property owners, the newspaper Kathimerini reported. Venizelos suggested that a tax-free threshold might be introduced but it wasn’t certain which way the government might go.
Stournaras is set to resume negotiations with the Troika on a number of issues, including its demands that 25,000 workers be let go this year, which the government is resisting, fearing political fallout from labor unions. While austerity measures have created a record near 27 percent unemployment rate, that is all in the private sector as the government has not fired any workers in the three years since pay cuts, tax hikes and slashed pensions began being imposed in return for bailouts.
Also, the recapitalization of Greek banks has yet to be completed, with the Troika now opposing a 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 said 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 ($3.5 billion) and the next installment of 6 billion euros, some $7.7 billion.
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