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Papandreou is speaking of a referendum

07 June 2011 / 13:06:17  GRReporter
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On the eve of the adoption of the medium-term recovery plan the Prime Minister of Greece George Papandreou called on MPs from all parties to support the new program. It is expected to bring new and more stringent economic measures in the next three years, and large part of the political opposition doubts the success of the recovery plan. At the same time, there are people even within the ranks of the ruling party who are not convinced that they like the planned economic diet. To approve the medium term plan the government should have 180 votes in Parliament. Papandreou, on the other hand, does not seek the minimum number of votes but the support of the entire political system to share with him the responsibility for the coming measures.

"We think that all they realize their national obligations. It is not an arithmetic problem (180 votes), but a political one. I'm talking about keeping the national agreement, for which I am going to continue to work," told his ministers the Prime Minister of Greece.

George Papandreou has the ball for the civil referendum thrown by the head of the Hellenic Federation of Enterprises Dimitris Daskalopoulos about two weeks ago. He said he would not hesitate to ask the people whether they are ready to follow the path destined by the government. "I am ready for the big changes we are preparing, even to use the right of referendum on the widest possible consensus, as stipulated in our current constitution." This recognition of the Prime Minister completely panicked the government. The Minister of Transport and Infrastructure Dimitris Repas said a referendum now would lead to elections and the elections would lead to the impasse. Political analysts of Katemerini argued that according to the constitution, the government can not consult the people on issues related to economic policy but only on political topics.

After Papandreou officially stated the idea of ​​a referendum in the public domain, he had to give explanations to the Council of Ministers on what he meant. Then it became clear that the question which would be placed before the Greeks will have a broader socio-political sense and would be connected with the political and economic model of the country. In other words, if there is a referendum then the main question most likely would be "Should Greece stay in the euro area or return to the drachma." Anyway, the eventual referendum will not happen in the summer when the government must finally accept the final version of the medium-term program and convince Europe that it will implement it in order to get the new financial support for the period 2012-2013.

At the same time, the measures in the medium-term plan are constantly changing. On the one hand, the government is trying to cover up its inaction in recent months and the gap in the revenue with new tax changes, and on the other hand, it has to deal with the socio-political response its decisions cause. Last week, the Ministry of Finance has announced that the minimum taxable income most likely will be seriously reduced from next year. Currently, it is € 12,000. The government proposal had two options. The first one was to reduce the non-taxable annual income to eight thousand euros, and the other – even more radical – to six thousand euros. If we take into account that the minimum wage in Greece is about 700 euros and that it is just enough to survive, the poor would have to pay too with the new minimum level of annual income.
 
The proposal angered further not only the discontented on Syntagma but the members of the National Assembly themselves and the socialist ministers. Even the Minister of Regional Development and Competitiveness Michalis Chrysohoidis recognized for the national Mega TV that he does not approve the reduction of the taxable income of individuals in order to increase the budget revenue at the expense of ordinary taxpayers. And while measures to combat tax evasion remain only a wish, the Ministry of Finance came up with another idea to increase the revenue next year. It is no less severe for the general mass of citizens and provides extraordinary tax on the salaries of workers in both public and private sectors, which would be within 4% -6% of the salary. The proposal is still being debated and it is not known whether it would be included in the final version of the medium-term recovery program.

Tags: EconomyPoliticsRefernedumPapandreouGreeceMedium-term recovery plan
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