Greece΄s Finance Minister Gikas Hardouvelis insisted that the government will gradually abolish certain tax measures and proceed with tax cuts.
Speaking at an Economist Group conference in Athens, Hardouvelis stated that fiscal policy should be well-thought and balanced and that budgets should be proportionate and “right.” He also noted that Greek aid program is near conclusion.Hardouvelis΄s comments are in line with Prime Minister Antonis Samaras΄ recent statements that Greeks should expect tax cuts in 2015 and the abolishment of certain tax measures that have not met their targets.
Sources told MNI that during the Eurogroup meeting of area finance ministers Monday in Brussels, Hardouvelis was cautioned by his counterparts to hold back on such announcement as crucial issues such as the 2015-2016 fiscal and financial gaps remain unaddressed.
In fact, according to sources, the recent decision by Greece΄s Council of State to order that wage and pension cuts in uniformed employees from 2012 be rescinded, could increase the fiscal gap by another E2 billion and could force Athens to take extra measures this year.Nevertheless, Hardouvelis reiterated that “crucial changes in taxation and the taxation administration will take place.”
“Taxes should be appropriate and budgets must be right. Fiscal policy must be well thought and balanced. We will abandon gradually tax measures if we can implement a just tax policy and tax administration,” he said.
Representatives from the European Commission, the European Central Bank and the International Monetary Fund are expected to arrive in Athens for an unofficial review of the progress made in the adjustment programme. The next official Troika review is expected to begin in September during which the fiscal, financial gaps and debt sustainability will be examined.
Speaking at the same panel discussion, Managing Director of the European Stability Mechanism, Klaus Regling stated that there will be “no haircut of Greece΄s debt” and added that it is still unclear if and how much Greece will need as additional financial aid and that it will mainly depend on the results of the European Stress tests expected in November 2014.