The junior partner in Greece’s ruling coalition plans to propose a tax amnesty on undeclared income deposited in Greek banks in a bid to reverse the rising tide of funds fleeing the country, the party’s leader said in an interview published on Sunday.
Panos Kammenos, the head of the right-wing Independent Greeks party in Prime Minister Alexis Tsipras’s anti-bailout government, said he would propose legislation cutting the tax on such income to 15 per cent from 42 per cent with an exemption on further taxes for the next four years.
“As far as banks and their liquidity is concerned, I believe the climate will improve soon,” Kammenos told the weekly Real News newspaper.
“A measure that we will propose to the government is the possibility of depositing cash whose origin cannot be warranted at banks subject to a 15 per cent tax and with depositors being exempted for the next four years.”
Greek banks have been hammered in recent weeks as the prospect of a stand-off with the country’s international creditors prompted savers to withdraw cash. Deposits fell in December for the third straight month and bankers expect the trend to have accelerated in January.
In the meantime, Greece’s new leftist government said it would not take any actions that would hurt the share values of the country’s banks and does not plan to appoint party officials at key management posts.
“We will not do anything that would hurt the share value of banks,” Gabriel Sakellaridis told Skai TV yesterday. “Whatever we do will in the banking system will be done in cooperation with private investors.”
Greece’s bank bailout fund holds majority stakes in three of the country’s four biggest banks - National Bank, Piraeus Bank and Alpha Bank.
“We will not appoint party officials at the management of banks,” he said.
Greece’s leftist government has began its drive to persuade a sceptical Europe to accept a new debt agreement while it starts to roll back on austerity measures imposed under its existing bailout agreement.
The government has wasted little time in making clear it intends to respect its election promises to end years of harsh austerity
After a turbulent first week in office, the new government has made it clear it wants to end the existing arrangement with the European Union, the European Central Bank and International Monetary Fund “troika” when its aid deadline expires on February 28.
Instead, Prime Minister Tsipras wants to agree a bridging deal with the troika to gain breathing space while a new deal is negotiated to reduce Greece’s unmanageable public debt burden of more than 175 per cent of its economic output, or €320 billion.
“For the last five years, Greece has been living for the next loan tranche. We have resembled drug addicts craving the next dose,” Finance Minister Yanis Varoufakis said after meeting his French counterpart Michel Sapin in Paris.
“What this government is all about is ending the addiction,” he said, noting that it was time to go “cold turkey”.
Varoufakis caused consternation on Friday when he said that Greece would no longer cooperate with troika monitors in Athens overseeing the bailout accord. He said Greece needed a short space of time to present its reform proposals and expected to be able to hammer out a new agreement with its partners within about six weeks. He said he wanted to deal directly with European partners, the ECB and IMF rather than go through inspectors from the troika.
The government has wasted little time in making clear it intends to respect its election promises to end years of harsh austerity.
It has halted a series of privatisations it says amount to a disposal of strategic national assets at fire-sale prices and has announced plans to reinstate thousands of public sector workers laid off by the last government as well as to raise low-income pensions.
On Sunday, Labour Minister Panos Skourletis said the government would restore collective bargaining and raise the minimum wage – cut to €586 from €751 a month under the 2012 bailout agreement.