Sinking Tsipras Will Woo Middle Class With Tax Breaks

Greek Prime Minister Alexis Tsipras waves next to his aid Ioanna Peppe as he leaves the Presidential palace after a meeting with Greek President Prokopis Pavlopoulos in Athens. Photo: (AP Photo/Petros Giannakouris, FILE)

ATHENS – After breaking their back with an avalanche of tax hikes – and with new taxes coming on families and individuals who had been exempt – Prime Minister Alexis Tsipras said is said to be trying to find some way to now cut their taxes and curry favor with election talk heating up.

The Radical Left SYRIZA leader broke anti-austerity vows to satisfy international lenders and get a third bailout in 2015, this one for 86 billion euros ($99.85 billion) after saying he wouldn’t because it came with more brutal conditions for workers, pensioners and the poor.

That has seen his popularity plummet with the major rival New Democracy he unseated taking leads from 8-15 percent and leading to speculation he may call snap elections in May, 2019.

They are required to be held by October of next year but reports said he wants to prevent the Conservatives from gaining momentum over his giveaway of the name of the ancient Greek province of Macedonia to rename the Former Yugoslav Republic of Macedonia as North Macedonia.

With three international rescue packages of 326 billion euros ($378.51 billion) expiring on Aug. 20, Greece will be left to the mercy of the markets and he will have to deal with the aftermath, including more scrutiny from the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) and more austerity.

With the country expected to kick into pre-election gear after September, the government is planning measures to ease the pressure on the middle classes in a frantic bid to bridge the gap with opposition conservatives in the opinion polls and to show that the Greek economy has indeed turned a corner.

More specifically, a meeting on Tuesday of ruling SYRIZA’s political council discussed how to use a 700-million-euro primary surplus which will be included in the 2019 budget to implement targeted tax breaks for the middle classes, which have arguably borne the brunt of Greece’s protracted financial crisis.

To this end, the government’s financial teams are reportedly already examining a series of tax relief measures which Prime Minister Alexis Tsipras plans to announce at the Thessaloniki International Fair (TIF) in September, which will coincide with the beginning of the pre-election period – with polls either in May, along with local and European elections, or in September 2019.

The council discussed the idea of modifying tax scales rather than slashing value-added taxes and the highly unpopular ENFIA property tax, as the latter two would come up against the objections of Greece’s creditors and have a horizontal impact rather than targeting the middle classes.

So far the government had focused its efforts on the poorest members of society with one-off bonuses drawn from recent surpluses, and it is expected to continue doing so.

But with a new tax storm looming as the country prepares to exit its third and final bailout program next month, there was consensus at Tuesday’s political council meeting that it is high time that middle-class citizens felt the benefits of the economic upturn the government has been preaching “in their pockets.”

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