ATHENS – International lenders so far are mum on the Greek government’s offer to double hotel taxes as part of reforms to close a fiscal gap for 2015 estimated at two to three billion euros.
Greece is hoping that will satisfy the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that has put up 240 billion euros ($306 billion) in two bailouts since 2010 but wants more tough measures before letting Prime Minister and New Democracy Conservative leader Antonis Samaras seek an early exit from the memorandum he signed with them.
The Troika won’t return to Athens to check on long-delayed reforms until the government makes a program that the lenders deem acceptable to closing a fiscal gap that the government says doesn’t exist.
The offer to raise the Valued Added Tax (VAT) on hotel rooms from 6.5 percent to 13 percent has rankled some in the government that includes the PASOK Socialists.
The government also reportedly committed to make “further corrections” next year if the budget execution goes off track and a high-ranking government official told Kathimerini that the Greek side believed it had made a significant compromise toward the troika. “We will see if they really want an agreement,” the official said.
Finance Minister Gikas Hardouvelis told a conference organized by the Hellenic-American Chamber of Commerce that negotiations with the Troika remained “tough” but that the Greek side was persisting in a bid to “avert a return to uncertainty.”
He added that “significant progress” had been made in the negotiations although talks with the Troika in Paris last week flopped with no progress reported.
At the same event, Deputy Prime Minister Evangelos Venizelos said Greece will not under any condition impose any more of the austerity he supported before he opposed it now.
“The country must not and will not introduce new austerity measures,” Venizelos said. He added, in an apparent dig at the major opposition Coalition of the Radical Left (SYRIZA) that “some are trying to fuel fears that are completely unfounded.”
Venizelos stressed that Greece must press on with delayed structural reforms but played down the extent of a feared overhaul to the pension system, noting that only “few additions and improvements” were necessary although the elderly are anxious their benefits will be cut again.
Venizelos said the aim was for the Troika’s review to be completed in time for a December 8 Eurozone meeting where the government hoped to get approval for a precautionary credit line and exit from the Troika before the rest of the IMF loans run out in 2016.
He conceded, however, that negotiations could drag on, but he expected they would be concluded before scheduled Presidential elections in February that SYRIZA hopes to thwart in a bid to force early national elections as polls show it’s leading on the back of his opposition to austerity measures Samaras imposed after he opposed them.
Troika officials also insisted the stalled talks were going well even though they said they weren’t before.
IMF official Rishi Goyal told a Capital Link investment forum in New York that talks with Greek officials were “constructive,” echoing the words of a European Commission spokesman earlier in the day with all sides apparently trying to spin a positive message.
In a recorded video message played at the same event, Samaras appealed to investors, noting that Greece had strengthened its economy over the past two years and was a European leader in fiscal adjustment although recovery is sluggish.
That came after German Finance Minster Wolfgang Schaeuble said that Eurozone finance ministers will discuss a possible credit line for Greece in early December up to 10 billion euros but with more austerity attached.