PARIS – Finance officials from Greece have started talks with the country’s rescue creditors, and are hoping to ease emergency taxes that have helped fuel recession.
Finance Minister Gikas Hardouvelis met with representatives of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) on Sept. 2 in the first bailout-related inspection held outside Greece.
The Paris talks are due to last three days and later include Greece’s ministers of development, justice and administrative reform.
Greece is struggling to end a recession that started in 2008 and is hoping to ease taxes imposed as part of austerity measure demanded by bailout creditors from Eurozone countries and the IMF.
But after saying it would seek tax cuts and debt restructuring, Greek officials now are pulling back hopes of getting much relief from international lenders in three days of talks in Paris.
Prime Minister Antonis Samaras, the New Democracy Conservative leader, had promised austerity-crushed Greeks he would bring them a break from big pay cuts, tax hikes, slashed pensions and worker firings he imposed on Troika orders.
But following a meeting with Samaras and Deputy Prime Minister and Foreign Minister Evangelos Venizelos, the PASOK Socialist leader who is a partner in the coalition government, Finance Minister Gikas Hardouvelis told reporters that expectations had risen too high.
A day after he said the Troika would be told that Greece wouldn’t accept any more austerity, measures which have seen support for New Democracy and PASOK dwindle, Hardouvelis backed off from the tough talk.
He said that Greece would not be setting down any non-negotiable terms or “red lines” in the talks in Paris which would focus on “technical” matters.
Greece’s “interlocutors” in Paris will be “executives of the Troika and as such can only talk about the memorandum,” Hardouvelis said, referring to Greece’s loan deal with its creditors. “They can’t talk politics.”
He disputed media reports – which the government hadn’t denied previously – that Greece wants the Troika to lower certain taxes, such as a consumption tax on heating fuel which has proved inefficient as well as environmentally harmful. “That’s not on the agenda,” he said. “If they raise the issue, we’ll have answers.”
Sources told Kathimerini that that the government decided to scale down hopes for tax relief to avert a huge disappointment if they fail to transpire and to assuage the Troika, which wants the government to stick to meeting fiscal targets.
Hardouvelis led a team of top-flight ministers on the Paris junket and Finance Ministry officials worked until late on Sept. 1 on the negotiating tactics and revising the new, unified property tax called ENFIA that sent out astronomically-high and incorrect bills to thousands of taxpayers.
The ENFIA tax and Greece’s proposals for less onerous payment plans for those with nonperforming loans are among the issues expected to be discussed in Paris along with the budget and general progress with reforms.
There was no word on whether New Democracy and PASOK, which owe Greek banks 250 million euros and aren’t paying while demanding austerity-weary Greeks have to meet their obligations would have to pay too.
Objections to ENFIA continued in the coalition ranksy, with New Democracy lawmaker Dora Bakoyannis claiming that the tax was being introduced at the wrong time and has “exasperated the whole of Greek society.”
(Material from the Associated Press was used in this report)