ATHENS – Greece’s international lenders have nixed a government scheme that would give taxpayers up to 100 installments with reduced interest and penalties to pay their debts to the state because it wasn’t approved before being sent to Parliament, a setback for Prime Minister Antonis Samaras’ plans to relieve some of the weight of austerity.
That bad news came just a day after Eurozone finance chiefs gave their okay to an early Greek exit from its bailouts with the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) – on condition it come with a precautionary credit line and that Greece passes a review by a Dec. 8 meeting of the Eurogroup.
The coalition of Samaras’ New Democracy Conservatives and its partner the PASOK Socialists had heralded the installment plan and is pushing more relief to counter its sagging popularity because of big pay cuts, tax hikes, slashed pensions and worker firings imposed on Troika orders.
Samaras is reluctant to withdraw the plan, Kathimerini said, because he feels it would be too politically damaging just as the major opposition Coalition of the Radical Left (SYRIZA) is trying to thwart election of a Greek President in February, 2015, which would force early national elections as polls show the Leftists have a growing edge.
The government also reportedly disagrees with the Troika’s assessment that the new measures, which include discounts on penalties and interest, would add around 1 billion euros to the fiscal gap, which had previously been estimated at some 1.5 billion by the lenders.
The State General Accounting Office has been ordered to go over the figures again so Greece can respond to the Troika’s objections but the lenders’ decision comes at a critical time for Samaras’ coalition.
According to coalition sources, the IMF believes that regardless of what impact the new measures have, the fiscal gap will be around 2 billion euros and the government will not be able to cover it with new cost-cutting measures.
It has recommended to the coalition that the target of a primary surplus of 4.5 percent of Gross Domestic Product be moved back a couple of years from the current goal of 2016. Whatever happens, Samaras will almost certainly have to sign a new memorandum to get a credit line buffer.
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