Eurozone official: VAT rates on islands must be harmonized; pension cut measure stands

Tuesday, 10 July 2018 17:30
SOOC/Alexandros Michailidis
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By N. Bellos

A Eurozone official in Brussels on Tuesday reiterated that suspension of a decision to harmonize VAT rates on five eastern Aegean islands – bringing them up to the same level as in the rest of the country – must end at the end of the year.

The same official expressed continued support for implementation of another round of austerity measures, which the Tsipras government has promised creditors to implement in 2019, namely, more pension cuts. Nevertheless, the same official recognized that there was always some margin to be “flexible”.

Asked about the issue of VAT rates on the islands – which have borne the brunt of the refugee/migrant crisis in the Aegean since the first half of 2015 – the official replied that the Eurogroup’s relevant services were not briefed about the decision to retain the lower rates, “something that should have been done, in order to be included in the final text of the program.”

While promising to keep the lower VAT rates “for as long as the refugee crisis continues”, a pledge made by PM Alexis Tsipras himself during an unscheduled nationwide address carried by the state broadcaster last month, the deferment is officially due to expire on Jan. 1, 2019.

The EZ official emphasized the point, saying the deferment “must” be abolished at the end of the year. 

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