Greece passes tax increases to appease foreign lenders

Greek Parliament

The Greek parliament has approved a series of unpopular tax hikes to increase government income, one of the main conditions to qualify for continued aid from its foreign lenders.

In a sitting that ran into the early hours of Saturday, a comfortable majority of lawmakers voted for the legislation, which the opposition said was another assault on Greece's struggling middle class.

On key articles of the bill, 163 of parliament's 300 members voted in favour. The legislation scraps many tax exemptions, raises tax rates on property and corporate profits, and slaps a capital gains tax on share sales, in the hope of generating about 2.5 billion euros of additional revenue in 2013 and 2014.

"It is a bill of fiscal necessity and responsibility, required for us to get our next bailout tranche," Finance Minister Yannis Stournaras told lawmakers.

The tax reform is part of an overall 13.5 billion euro austerity package that Athens passed in November to qualify for further bailout funds from its European Union and International Monetary Fund lenders and avert bankruptcy.

Passing the bill in parliament was one of the conditions Athens had to fulfil to get 14.7 billion euros in additional rescue loans by the end of March on top of a 34.3 billion euro sum the lenders unlocked last month.

But the reform is expected to increase the squeeze on austerity-hit household budgets and weigh on an economy entering its sixth consecutive year of recession. The economy is expected to contract by 4.5 percent this year.

Opposition lawmakers attacked the bill as yet another attempt by the government to punish the long-suffering middle class instead of pursuing tax evaders and the wealthy.

"This is a bill that puts into action a plan of destitution. 700,000 Greeks can't pay their electricity bills, there are 3 million poor people in our country and 57 percent of our youth is unemployed," said Panos Kammenos, head of the anti-bailout Independent Greeks party.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.