Athens Digest 09.03.2018

• Tsipras promises small businesses a tax reduction ‘roadmap’

• Greek debt relief hopes boosted by IMF remarks

• Parliament rejects widening health corruption probe

• Transport bill: Cab drivers shielded from ride-sharing platforms

# The government is committed to gradually easing taxes on small businesses as the country begins a period of sustained growth, the prime minister said. Alexis Tsipras declared Greece’s recession finally over. Efforts by his government, he said, had put the country’s fiscal house in order, allowing for a period of growth over the next several years that would average 2 percent. Small and medium-sized businesses were hammered by Greece’s financial depression and only ended a steep failure rate last year. Tsipras, speaking at a business congress, gave no indication of when or by how much taxes would be cut, saying only that the government would create a “roadmap” to implement gradual reductions.

# As Greek officials negotiate terms of a possible debt-relief plan with European creditors, the IMF indicated it could back an ESM buy-up of its Greek debt.
Gerry Rice, the IMF spokesman, told reporters at a Washington briefing that he had no specific comment for the buy-up scenario, but added; “We would always be in favour of supporting appropriate measures that can help reduce a country’s debt burden.” European officials have not ruled out taking over Greek obligations to the IMF, noting that it is too early to make a final decision. This is expected in April the earliest.

# Parliament has rejected an opposition proposal to investigate three government ministers for possible breach of duty in controlling public health spending. Government MPs voted against the proposal brought by the conservative New Democracy against former health minister (and current minister of merchant marine) Panagiotis Kouroumplis, and his successor Andreas Xanthos, as well as his deputy Pavlos Polakis. The vote followed a heated debate during which Prime Minister Tsipras accused the opposition of a “poorly staged” effort to divert public attention from the alleged Novartis bribery scandal and the investigation against 10 senior conservative and Socialist politicians.
One of them, former prime minister Antonis Samaras, wrote to the Financial Times, accusing the Tsipras government of having “mounted an unprecedented attack on independent institutions and the rule of law.”

# Less than 48 hours after a protest by Greece’s largest taxi union, the government has sent draft legislation to parliament that would protect cab drivers from ride-sharing services like Uber. The proposed regulations would impose tough restrictions on “car rental with driver” services, provided via platforms. They still include a time restriction which would allow only one ride every three hours. The OECD has described the restrictions as a market distortion. But Greece’s bailout European creditors have not raised objections, instead giving priority to major reforms that were needed to conclude the previous review.

On our Radar: Legal headache for pension cuts
A special court has ruled that pension cuts for judges and public prosecutors imposed as part of successive bailout measures were not legal and should be reversed to 2012 levels. While the court recognized that lawmakers had acted out of a “pressing need to comply with financial requirements,” it said the reductions were not legally justified. The ruling came as several other legal challenges are pending and as the government braces for a new round of pension cuts next year as part of the so-called pre-legislated package agreed between Greece and creditors. Pension associations organized a protest rally in central Athens yesterday to protest the 2019 cuts.