Greece gets nod from creditors to ease bailout-era taxes

Posted on Thursday, July 18th, 2019 By Derek Gatopoulos, Associated Press


Greek Prime Minister Kyriakos Mitsotakis, right, Deputy Prime Minister Panagiotis Pikrammenos, center, and Finance Minister Christos Staikouras, left, take the oath during a swearing in ceremony at the parliament in Athens, Wednesday, July 17, 2019. Greece held its first parliamentary session after the general elections held on July 7. (AP Photo/Yorgos Karahalis)

ATHENS, Greece (AP) — Senior officials from Greece's creditor institutions are meeting in Athens with the country's new conservative government, which is planning to begin dismantling bailout-era taxes next month.

Representatives of the European Commission, European Central Bank, the International Monetary Fund, and a eurozone rescue fund were holding meetings Thursday with at least five cabinet ministers, government officials said.

Prime Minister Kyriakos Mitsotakis' conservative New Democracy party returned to power after winning a general election earlier this month on a pledge to cut taxes imposed during Greece's three successive international bailouts.

The final bailout program ended last August, after Greece had received a total of nearly 290 billion euros ($325 billion) in rescue loans.

Bailout institutions, which hold most of Greece's debt and set repayment terms, are broadly in favor of easing tax rates but are also pressing the government to stick to strict budget performance targets.

"I know that the government wants to lower taxes which in principle I think is positive because it's growth-friendly," Klaus Regling, head of the European Stability Mechanism, the euro area's rescue fund, told state-run ERT television in an interview.

"The question is always how it's financed because it means there will be less revenue."

Regling and other creditor representatives are in Greece to attend a financial conference near Athens.

Mitsotakis is likely to give details of his planned reforms during a three-day debate in parliament that ends late Monday with lawmakers formally voting to back his new government. He will address parliament for the first time Saturday.

His government has already received a positive response from investors who covered Greece's market borrowing needs for the year in a seven-year bond auction — the third in 2019.

Greece raised 2.5 billion euros in Tuesday's auction, with offers exceeding 13 billion, at a yield of 1.90%, a historic low.

___

Follow Gatopoulos at https://twitter.com/dgatopoulos

Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.

Yahoo Gemini Pixel