Greece’s PM  Alexis Tsipras pushes through €1.8bn package of indirect tax increases despite opposition

“Spring may be almost over but we are looking forward to an economic spring and a return to growth this year,” the prime minister told parliament, wrapping up a two-day debate on a €1.8bn package of indirect tax increases.

As expected, all 153 legislators from the premier’s Syriza party and its coalition partner, the rightwing Independent Greeks, backed the bill, while 145 opposition deputies voted against. There were two abstentions.

The latest measures complete a €5.4bn package of fiscal reforms aimed at ensuring a primary budget surplus, before payments of principal and interest on debt, amounting to 3.5 per cent of national output by 2018.

But the legislation also included a provision for “contingency” measures, including wage and pension cuts, that would take effect automatically if budget targets were derailed next year.

An upbeat Mr Tsipras insisted that budget projections would be outperformed, saying: “Greece has shown it keeps its promises … I’m certain [contingency] measures will not have to be put into effect.”

A senior Greek official said after the vote he was confident that eurozone finance ministers would unlock up to €11bn from Greece’s €86bn third bailout at a meeting scheduled for Tuesday.

The funding, to be disbursed in several tranches linked to implementing the reforms, would enable Athens to meet sovereign debt repayments for the remainder of the year and also channel funds to public services such as the healthcare system.

But the same official stressed that Athens would not have a specific role in debt relief talks that are set to begin at Tuesday’s meeting.

“Greece wants as much debt relief as possible but we don’t have leverage. It’s up to the lenders [the European Union and International Monetary Fund] to agree on the decisions,” he said.

Thousands of public sector workers shouting anti-austerity slogans staged a protest outside the parliament building as the debate was taking place.

Spring may be almost over but we are looking forward to an economic spring and a return to growth this year
Alexis Tsipras
Panayotis Lafazanis, a former Syriza cabinet minister, and members of his far-left splinter group Popular Unity, hoisted a giant banner saying the measures “shall not pass”.

The legislation on tax increases, due to take effect on June 1, includes a one percentage point rise in the main value added tax rate to 24 per cent on foodstuffs and consumer goods.

Taxes on cigarettes, coffee and craft beer were also raised, while an unpopular property tax was restructured to increase revenues from larger buildings.

Two structural measures that the Syriza-led government had resisted for months were also approved: setting up a privatisation agency and allowing Greek banks to make deals with international funds on restructuring and selling non-performing loans.

The new privatisation agency would have a 99-year remit to develop and sell a much larger portfolio of state-owned property than Taiped, the current fund set up under the first bailout in 2010, which has struggled to dispose of state-owned companies and infrastructure organisations. Reports by FT.Com,