Government agrees to increase taxes as debt deadline looms
GREECE’S Syriza government admitted yesterday that it had reluctantly agreed to “harsh” economic reforms in return for a debt bailout.
Athens has offered a series of measures such as tax increases to persuade creditors, including other EU states and the International Monetary Fund, to extend credit ahead of a June 30 payment deadline.
Worried depositors withdrew an estimated €4 billion (£2.8 billion) from Greek banks last week as anxiety mounted over the crisis.
French Finance Minister Michel Sapin was optimistic about the proposals, saying that only “one last push” was needed in negotiations tonight.
But IMF managing director Christine Lagarde was less enthusiastic, saying on Monday that the proposals were “still short of everything that we expected.”
Athens has argued that austerity reforms are needlessly harsh for the economy, which has shrunk by a quarter in the last five years and seen unemployment soar to 25 per cent.
Government spokesman Gabriel Sakellaridis said: “There is full comprehension that there are measures in the proposal that are harsh and they are measures that, under different circumstances, if it was up to us, there was no way we would have taken.”
Mr Sakellaridis noted that the proposed measures sought to increase taxes on those with higher incomes, rather than on low-income families, salaried workers and pensioners.
But Prime Minister Alexis Tsipras may find it difficult to win the support of the MPs in his government, including members of the right-wing anti-EU Independent Greeks.
However, the deal is likely to pass with support from opposition parties.
Communist trade union front Pame held a demonstration yesterday morning in central Omonia square, calling for a “people’s mobilisation to block the savage new anti-people agreement, the new anti-people package they are going to burden us with.”
The Pame statement read : “The EU ‘one-way street’ has been demonstrated to be disastrous and damaging for the workers’ and people’s interests.
“The solution is to be found in struggles under the banners of the workers’ and people’s interests, on the basis of our rights and needs and not those of the bosses.”