Βy T. Tsiros
“Reserved optimism” was expressed by government officials after the latest round of talks in Athens on Wednesday between representatives of institutional creditors and the Greek side, as roughly 36 hours remain before the scheduled departure of the former.
If negotiations are successfully concluded by the week’s end then the embattled leftist government can essentially submit two tax-related draft bills to Parliament next week for ratification.
Two “sticking points”, in terms of tax policy, between creditors and the Greek government are Athens’ proposal to allow businesses a single bank account that is protected from confiscation, seizure or whatever injunctions by third parties. The idea is to allow a business enough liquidity to pay taxes, social security contributions and it payroll.
Creditors reportedly objected, although the latest press reports refer to a compromise of between 30 and 40 percent of a business’ capital enjoying “protection”, and thus avoiding a “sudden death” scenario.
Another disagreement surfaced over Athens’ proposal for undeclared capital, with a possible compromise pointing to a tiered tax rate reaching up to 30 percent. A regressive tax rate would ostensibly provide an incentive to people to declare untaxed capital.
Furthermore, creditors were more than clear in stating their opposition to the creation of a state-funded “development fund” proposed by the Tsipras government, as part of an upgrading of the current National Fund for Entrepreneurship and Development (ETEAN).
The proposal has long been a “pet project” by Economy Minister Giorgos Stathakis, who has lobbied for a state-controlled development bank in the country.
Representatives of creditors, now known as the “quartet” – EC, ECB, SSM and IMF – were adamant that such a proposed entity would only create a state lender in competition with systemic banks.
Creditors have insisted over the past year that top managements in Greece’s crisis-battered banking system be completing separated from political influence and interference.
Additionally, creditors raised the question of where such a veiled “development bank” would find capital.
