Thu, Dec 04, 2014 - Page 15 News List

Greece rejects EU, IMF call for rise in tax, income cuts

Reuters, ATHENS

Greece has rejected its international lenders’ demands for tax rises and income cuts next year, Greek Prime Minister Antonis Samaras said on Tuesday, adding that such measures would be disastrous for the nation which has emerged from a deep economic recession.

Talks with EU and IMF inspectors have dragged on for weeks without agreement on next year’s budget, leaving Athens short of time to wrap up its final bailout review by a deadline of Monday next week and pave the way for an early exit from the bailout by the end of the year.

“Greece has done a lot already,” Samaras said.

“As we are negotiating our final review, several conditions have been set, including tax rises and income cuts, but we have rejected them,” he said, adding that the government had accepted some other measures instead, without providing details.

A rise in the value-added tax rate for hotels and pension reforms are among the measures which are being discussed with lenders, government officials said.

The Ministry of Finance said that lenders had been demanding additional measures in the belief that Greece would fall short of its budget target next year. It said Athens disagreed with the assumption of a shortfall.

If the government’s estimates for a balanced budget next year were wrong, Greece would take extra measures within the year, Samaras said, adding that political uncertainty was weighing on the negotiations and was the nation’s biggest problem.

Greece could face early elections next year, depending on the outcome of a separate vote to elect a president. The latest opinion poll by the Pulse agency showed the main opposition, the radical leftist Syriza party, would win with 29.5 percent of the vote if national elections were held now.

Speaking at the same conference earlier in the day, Syriza leader Alexis Tsipras promised that, if elected, he would swiftly scrap the nation’s EU/IMF bailout without waiting for the outcome of talks with lenders.

“We will replace the bailout with [Syriza’s] program from the initial days of our government, before and regardless of the outcome of the negotiation,” Tsipras said.

“This program aimed at healing our wounds and restarting the economy will be implemented irrespective of, and beyond, the process of tough negotiations, which we know won’t be easy,” he said.

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