© Copyright Embassy of Greece 1996-2005. All Rights Reserved.
24 October, 1998
A marathon inner cabinet meeting yesterday put the final touches to the 1999 budget, which includes a package of lower indirect taxes which will cost state coffers 180 billion drachmas but aid in the fight against inflation.
National Economy and Finance Minister Yiannos Papantoniou said after a five hour meeting that the government would speed up procedures to present next year's budget in an effort to reassure foreign markets and Greek society that the country was heading safely towards EMU despite turmoil in international markets.
Mr. Papantoniou confirmed that there would be no new taxes in 1999, nor a new tax draft bill.
Final decisions on the exact cuts in indirect taxation will be taken at a Cabinet meeting to be held shortly before the budget is tabled in Parliament, in mid-November.
The cuts proposed include a 20 percent reduction on special consumer charges on vehicles as of 1999 and a reduction in VAT on electricity bills from 18 to 15 percent. An alternative proposal is for a reduction in VAT on medicine and on water bills from 8 to 5.0 percent.
Mr. Papantoniou said the fight to stamp out tax evasion and raise revenues would continue with the implementation of new computerised technology at the country's tax bureaus.
The inner cabinet meeting also decided to freeze all public utility rates for next year to further aid in bringing down inflation.
Mr. Papantoniou stressed that the inner cabinet was unanimous in confirming that the central goal of economic policy was to achieve convergence criteria by end-1999 so to allow Greece's inclusion in economic and monetary union in first half 2000.
1999 will be a year of strong growth for the Greek economy, he said.
Mr. Papantoniou said that an ambitious Public Investment Programme would amount to 2.3 trillion drachmas in 1999 compared to about 1.9 trillion drachmas this year, meaning an increase in public investments (also jointly funded by the European Union) in the region of 17 per cent in nominal and 15 per cent in real terms.
He also offered assurances that next year's budget will include a considerable restriction in consumer state expenditures to control extravagance in the public sector. On the question of expenditures for each ministry, Mr. Papantoniou avoided giving any
details, invoking the "standing habit", both in Greece and abroad, for relevant funds to be disclosed when the budget itself is submitted.
Source: Athens News Agency