Finance Minister Says He’ll Quit Before Cutting Tax-Free Ceiling Further

ATHENS -Finance Minister Euclid Tsakalotos has reportedly said he would step down if the country’s international lenders insist on reducing the tax-free threshold that would make the poor and working-class pay an even greater share of austerity measures.

He said the coalition government of Prime Minister and Radical Left Alexis Tsipras’s government would not lower tax-free threshold below 9,091 euros ($10,279) from it current 9,545 ($10,736) as the International Monetary Fund (IMF) said it should be 8,180 euros ($9,249).

That means the burden of austerity would again fall on the country’s most vulnerable sectors while tax cheats, the rich and politicians largely escape, along with those exempted, including the military and Parliament workers.

The Quartet of the European Union-International Monetary Fund-European Central Bank-European Stability Mechanism (EU-IMF-ECB-ESM) is withholding funds from a long-delayed third bailout of 86 billion euros ($98 billion) until Tsipras and Tsakalotos relent to more tough reforms.

The government, which includes the pro-austerity, far-right nationalist Independent Greeks (ANEL) has been predicting since last August a deal was due any day now but now expectations have been pushed back until the end of May at the soonest.

The newspaper Kathimerini said the fight over the tax-free ceiling was the last straw for Tsakalotos, a Marxist economy who has bee forced to swallow Capitalist demands and that he said he’d walk away before lowering the tax-free threshold.

Tsipras and Tsakalotos have been rebuffed in talks with the Quartet over over tough conditions attached to a third rescue package of 86 billion euros ($98 billion).

That has pushed the country’s debt to 326 billion euros ($368.61 billion), an amount both sides have said can’t be repaid even as they struggle to determine some form of relief that at this stage won’t include a cut in what the country must pay, just lower interest rates and a longer repayment period.

But Tsipras – with tax revenues falling despite big tax hikes – is frantic for a deal as huge summer repayments loom and as his wobbly partnership with ANEL is teetering with only a three-vote majority in Parliament ahead of a new package of tough measures.

What’s holding up a deal is Tsipras’ dance around demanded new pension cuts, more tax hikes, allowing banks to go after people who can’t afford to pay their loans, credit cards and mortgages because of big pay cuts, tax hikes, slashed pensions and worker firings, and creating a new privatization fund after he swore to stop the sale of Greek assets.

Tsipras had hoped for a deal by the April 22 meeting of Eurozone finance chiefs that wound unblock third bailout monies being held up until he concedes on key demands but creditor envoys said that’s not going to happen.

Tsipras reportedly said he’s made enough compromises and if he bends any more after breaking virtually all hsi campaign promises it would trigger snap elections for the third time in 18 months.

The lenders want Greece to commit to measures that would create a primary surplus of 3.5 percent instead of 1.5 percent that is the government’s target.

An alternative is for an extraordinary meeting of eurozone finance ministers to be held before Orthodox Easter on May 1, but doubts remain that could be met either.

“Maybe the most realistic date for an agreement is toward the end of May,” an EU official with knowledge of the negotiations told Kathimerini.