Finance Minister urges MPs to back multi-bill containing prior actions

Finance Minister urges MPs to back multi-bill containing prior actions

Athens, May 18, 2016/Independent Balkan News Agency

By Zacharias Petrou

Finance Minister Euclid Tsakalotos appealed for the support of Syriza MPs for the multi bill the government is preparing, containing prior actions required for the conclusion of Greece’s first bailout program review.

Euclid Tsakalotos briefed Syriza MPs in parliament along with Economy Minister Giorgos Stathakis and Alternate Finance Minister Giorgos Houliarakis who also spoke to lawmakers.

More than twenty Syriza MPs spoke during the meeting, mainly to request technical details of the provisions of the multi-bill that is expected to provide for tax hikes, the establishment of a new privatization fund and the sale of nonperforming loans to funds.

Syriza MPs told the Finance Minister that they want to be briefed on the privatizations the government will carry out as part of the agreement with creditors. Concerns were also raised by many MPs about the large number of tax hikes to be imposed, especially those on fuel and heating oil. However, none of the MPs indicated they will oppose the draft bill.

According to Greek government sources, the automatic spending cuts mechanism agreed with creditors is already being drafted into law and the government could table it in parliament along with the omnibus bill.

Earlier, reports suggested that creditors are pushing for deeper cuts in the automatic spending cuts mechanism, therefore the government might not include it in the multi-bill but rather introduce it via an amendment.

Speaking to MPs Finance Minister Euclid Tsakalotos said the mechanism will probably not be used at all as the economy is on course to achieve the fiscal targets agreed with creditors.  It was also pointed out that the Greek Finance Minister would have one month to take measures if and when public finances appear to be veering off track; he will chose which cuts will have to made by the “mechanism” and if the Minister takes no action during this period the “mechanism” will then automatically kick in.

Furthermore, the government’s economic team revealed to MPs that there is a positive climate in debt relief talks with creditors as they want Greece to return to bond markets as soon as possible.

Responding to concerns about the barrage of tax increases parliamentarians will be called upon to approve, the ministers pointed out that tax hikes will not be immediate, they will be applied over the next two years, making it easier for the real economy and households to absorb them.

It was characteristically stressed that the tax increases agreed “offset the imposition of other, much tougher tax hikes such as increasing VAT on water and electricity consumption to 24%”.

Ministers also argued that once the bailout review is over, the government will have the next three years to unfold its economic program that will boost growth and support those on low incomes. As soon as bailout cash is disbursed to Athens, the government plans to proceed with paying off debts to private individuals and businesses.

Furthermore, over the summer months, the government will bring a set of draft bills to parliament aiming to boost growth and push the economy towards recovery. These include legislation to tackle smuggling of oil and cigarettes, providing incentives to declare hidden income, providing a stable tax environment to those investing more than 20 million euros in Greece, and more.