Troika dis­misses tax ar­rears law

Coun­try’s lenders say leg­is­la­tion grant­ing up to 100 in­stall­ments does not have ap­proval, would cost 1 bln

Kathimerini English - - Front Page -

Just a day after se­cur­ing the Eurogroup’s ap­proval for a pre­cau­tion­ary credit line to exit the Greek bailout at the end of the year, the gov­ern­ment has en­coun­tered a new prob­lem with the troika, which has taken ex­cep­tion to a new law in­creas­ing the num­ber of in­stall­ments in which tax­pay­ers can pay off their debts to the state.

Kathimerini un­der­stands that the troika has writ­ten to the gov­ern­ment to ask for the mea­sures to be with­drawn as they did not have the prior ap­proval of the coun­try’s lenders be­fore be­ing sub­mit­ted to Par­lia­ment. The law, which al­lows tax­pay­ers up to 100 in­stall­ments in which to pay off their dues, was passed by MPs last month.

The coali­tion had hailed the leg­is­la­tion as a move to lighten the bur­den on be­lea­guered tax­pay­ers and be­lieves that with­draw­ing it now would be far too po­lit­i­cally dam­ag­ing. It also dis­agrees with the troika’s as­sess­ment that the new mea­sures, which in­clude dis­counts on penal­ties and in­ter­est, would add around 1 bil­lion euros to the fis­cal gap, which had pre­vi­ously been es­ti­mated at some 1.5 bil­lion by Greece’s lenders.

The gov­ern­ment dis­agrees with this eval­u­a­tion and be­lieves that the num­bers are much smaller. The State Gen­eral Ac­count­ing Of­fice has been or­dered to go over the fig­ures again so Greece can re­spond to the troika’s ob­jec­tions.

Ac­cord­ing to coali­tion sources, the In­ter­na­tional Mon­e­tary Fund be­lieves that re­gard­less of what im­pact the new mea­sures have, the fis­cal gap will be around 2 bil­lion euros and the gov­ern­ment will not be able to cover it with new cost-cut­ting mea­sures. It has there­fore rec­om­mended to the coali­tion that the tar­get of a pri­mary sur­plus of 4.5 per­cent of gross do­mes­tic prod­uct be moved back a cou­ple of years from the cur­rent goal of 2016.

Athens is skep­ti­cal about such a move be­cause it be­lieves that the troika would ask for new struc­tural re­forms in re­turn and the gov­ern­ment does not want to com­mit to new ac­tions with the pos­si­bil­ity of early elec­tions loom­ing.

Eu­ro­zone fi­nance min­is­ters agreed on Thursda that should the cur­rent troika re­view be com­pleted by the De­cem­ber 8 Eurogroup, Greece would be granted pre­cau­tion­ary support un­der the Euro­pean Sta­bil­ity Mech­a­nism’s En­hanced Con­di­tions Credit Line (ECCL) for up to a year. This, how­ever, would re­quire the gov­ern­ment to sign a new mem­o­ran­dum of un­der­stand­ing.

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