Greece promises to stop job losses

Greece’s new coalition government has vowed to repeal some of the country’s taxes, stop job lay-offs and extend by two years the deadlines for the austerity measures imposed by its international bailout.

The policy statement issued by the three-party administration came as the country’s new Prime Minister, Antonis Samaras, had eye surgery while finance minister Vassilis Rapanos remains in hospital after he fell ill on Friday.

The statement said: “The general aim is no more cuts to salaries and pensions, no more taxes.”

Mr Samaras’s conservative New Democracy party came first in the June 17 elections but did not win enough votes to govern alone. His party is now in government with its long-time rivals Pasok and the small Democratic Left party.

While pledging to stick to the terms of the bailout from, all three parties are seeking to renegotiate certain aspects of the loan with the so-called Troika: the EU, European Central Bank and International Monetary Fund.

Greece is mired in the fifth year of a deep recession and has seen unemployment rocket to 22%.

Widespread anger with rapidly falling living standards has led to a massive increase in support for so-called anti-bailout parties in the last two elections.

Meanwhile, the new government says it aims to extend by at least two years the deadlines for it to impose harsh fiscal measures “to support demand, development (and) employment”.

The statement goes on: “This way the final fiscal target can be achieved without further cuts to salaries and pensions, or the public investment program, but through curbing waste and the targeted fighting of corruption, tax evasion and the black economy.”

Reducing consumer tax on restaurants and agriculture will also be sought, and one-year unemployment benefit may be extended by another year.

It says it will also seek to extend unemployment benefit to self-employed people who have lost their businesses, and gradually increase the tax-free income limit to European averages.

The coalition says it plans to restore collective wage agreements “to the level defined by European social law” and review cuts to the national minimum wage which was slashed by 22% this year to just 580 euro (£468) a month so Greece could receive a second bailout.

Another move could be introducing a single tax to replace the numerous property taxes in Greece.

Debt inspectors from the European Commission, European Central Bank and IMF are due to return to Athens on Monday to resume talks, on hold because of the country’s nearly two-month political deadlock.

Whether the new government can meet its renegotiating promises is said to depend on how they are viewed by their creditors. For instance, Germany, the largest single contributor to Greece’s bailout, has repeatedly said the government of Greece must stick to its austerity targets.

The policy statement was issued shortly after Mr Samaras underwent surgery to repair a detached retina. Separately, Mr Rapanos, the newly appointed finance minister, has been in a private hospital since Friday after complaining of nausea, intense abdominal pain, dizziness and weakness.

A hospital statement on Saturday said Mr Rapanos’s health is “stable and improving”.

It did not say what he was suffering from or give any details about his condition, other than to say his treatment would continue. It was unclear how long he would remain in hospital.

Mr Rapanos, who was named to the post on Thursday, has not been sworn in to office yet. His swearing-in ceremony was scheduled for Friday evening but had to be postponed.

Mr Samaras faces the first test of the coalition’s pledge to renegotiate some of the bailout terms next week when goes to Brussels for a European Union summit on June 28-29.