Bailouts Over, Greek Parliament Starts Cutting Taxes

(FILE - Photo by Eurokinissi/Stelios Misinas)

ATHENS – Keeping to his word, new Prime Minister and New Democracy leader Kyriakos Mitsotakis pushed through the Greek Parliament a measure that will roll back some taxes imposed as part of 326 billion euros ($363.38 billion) in three international bailouts.

Those ended on Aug. 20, 2018 but Greece still hasn’t been able to make a full return to markets despite the recent sale of a seven-year test bond for 2.5 billion euros ($2.79 billion) that sold at interest rates a little above those for the rescue packages.

Mitsotakis said he wants to lure back foreign investors scared off by an avalanche of taxes imposed by the former ruling Radical Left SYRIZA whom he ousted in July 7 snap elections and he’s vowed to cut the corporate rate from 29 percent to 20 percent over two years.

“No one will be exempted from this generous relief,” Mitsotakis said before the vote, adding that four million Greeks would soon benefit from the new measure, said the news agency Reuters.

The annual budget cost of the cut is estimated at 205 million euros. ($228.55 million.)

The draft law extends payment plans for debtors to the state to 120 monthly installments to more debtors, offers discounts and cuts the minimum monthly repayment to 20 euros ($22.29) for those who have lower incomes.

Mitsotakis, who came to power on July 7, oustingh SYRIZA leader Alexis Tsipras, called on debtors to “take advantage of a very generous repayment scheme” adding that it was a last chance for such flexibility and that future schemes would have stricter terms.

Most of the SYRIZA taxes and those implemented by former governments signed memoranda with the country’s creditors – including a previous New Democracy-led coalition when the Conservatives were headed by then-Premier Antonis Samaras – will remain in effect, however.

All 158 New Democracy lawmakers in the 300-member Parliament and main opposition parties supported cutting annual property taxes by up to 30 percent depending on the total estimated value of a taxpayer’s assets and and improve the terms of a  repayment program for delinquent taxpayers to settle debts of more than 100 billion euros ($111.46 billion) over 10 years.

Greeks had additional taxes heaped on them during three international bailouts, funded by the International Monetary Fund and the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM), as poverty and unemployment rates surged.

 

(Material from the Associated Press was used in this report)

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