Greek Finance Minister Yanis Varoufakis outlined a plan that he said will allow Greece to return to market borrowing, in an interview to Greek newspaper “Avghi.”
Among others, the plan called for the issue of a low-interest, 30-year loan from the European Stability Mechanism (ESM) to replace the debt currently held by the European Central Bank (ECB), while simultaneously restructuring the rest of Greece’s debt.
According to Varoufakis, the government’s priority is a “combination of debt restructuring, investment injections and reforms that go beyond the inhumane practice of cutting pensions, benefits and wages.” Such a combination, he added, will help Greek society escape the “vortex” of a self-reinforcing crisis of debt and recession.
Varoufakis slammed the ENFIA single property tax introduced by the previous government, saying it was a “hideous” tax that needs to be abolished. “As long as it is not abolished, we all feel accountable to the Greek people. But its abolition, even if gradual, will take place when the negotiation has ended and we can find equivalent taxes from large property taxation and from gradated taxation of incomes that are now evading,” he said.
The Greek Finance Minister was also critical of a position expressed by European Commission President Jean-Claude Juncker, who called for an additional 1.8 billion euros to be raised by increasing VAT.
“In an economy in the throes of deflation and debt, with a tax system that burdens the have-nots, how can we increase public revenues by 1% of GDP via indirect taxation without causing even greater damage to the economy’s engine, to production and the markets?” Varoufakis wondered.
Replying to those speculating about his possible resignation, Varoufakis stressed that “none of us is going to throw down his shield.”