ATHENS, May 23: Greek lawmakers approved tax increases and a new privatisation fund nd freed up the sale of non-performing loans in exchange for much-needed bailout loans and debt relief.
Yesterday Athens hopes the measures, two days before a key euro zone finance ministers meeting, will help it unlock the funds it needs to pay IMF loans, ECB bonds maturing in July and increasing state arrears.
“Greeks have already paid a lot, but this is probably the first time that the possibility of these sacrifices being the last is so evident,” Prime Minister Alexis Tsipras told lawmakers before a vote in parliament.
His left-led coalition, re-elected in September on pledges to implement the terms of a 86-billion euro bailout it signed up to in July, has a narrow majority of 153 lawmakers in the 300-seat parliament.
The coalition voted in favour of the reforms with only one MP against some articles on the new privatisation fund and a contingency mechanism of spending cuts that will be activated only if Athens looks set to miss its fiscal targets.
Syriza MP Vassiliki Katrivanou later resigned saying in a post she uploaded on Facebook that: “we are implementing measures and policies which are against the core of our values.” Her resignation will not affect the government’s majority since she will be replaced.
The taxes will hit Greeks where it hurts, with increases in value added tax by one point to 24 per cent, more tax on fuel, tobacco, internet usage and an extension of a property tax.
Hundreds of demonstrators rallied outside parliament in the evening to protest against the reforms.
“It’s a disaster!,” said 60-year old businessman Panayiotis Kehris. “We will cut down on everything, from food to driving.”
To appease the angry public, Tsipras told lawmakers that each time Athens exceeds its annual primary surplus targets, the extra state revenues would go to a social solidarity fund. About 700 million euros would go to the fund this year, he said.
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