(FT) -- Greece's central bank governor has lashed out at the socialist government's latest austerity measures ahead of this week's critical parliamentary vote on a four-year austerity package.
George Provopoulos warned that pressure on Greek taxpayers had reached its limits with last week's announcement of €5.6bn ($7.8bn) of additional measures to plug a gaping hole in the €28bn program of spending cuts and tax increases.
"The package doesn't give enough emphasis, in my opinion, to cutting expenditure. The extra burden on those already being taxed has exhausted the possibilities," Mr Provopoulos said in an interview published on Sunday in the Athens newspaper Kathimerini.
The government should focus on reducing tax evasion, he said. "Tackling tax evasion is essential ... to strengthening a sense of justice and increasing the degree of consensus for the medium-term program."
Mr Provopoulos's remarks came as the governing socialists tried to rally support for the package, despite a threat by five disaffected deputies to withhold their votes, a move that would wipe out the socialists' majority in parliament. With 155 of the 300 seats, the socialists face the possibility of having to rely on support from dissident conservatives to approve the package and avert the possibility of Greece defaulting in July.
Parliament is set to hold a roll-call vote on the medium-term package on Wednesday following a three-day debate. A second vote is due on Thursday to approve an enabling law to ensure the package can be swiftly implemented.
Both pieces of legislation have to be approved before the European Union and International Monetary Fund will release another €12bn tranche of Greece's current loan, and move ahead with negotiations on the country's second bail-out.
Evangelos Venizelos, the deputy prime minister and finance minister who agreed the latest measures with the EU and the IMF, said they were essential for Greece to draw down the next loan tranche.
"I know these measures are tough and in many respects unfair," he said. "But it was the only way to complete the [EU-IMF] negotiations and get the loan."
As a result, annual taxes on property were raised while the tax-free income allowance was slashed. An annual "solidarity" tax was imposed on salary earners for the duration of the medium-term program.
The measures have angered middle-class Greeks who feel they have been unfairly squeezed because of the socialists' reluctance to tackle tax evasion by self-employed professionals and a group of Athenian business "oligarchs" who make generous contributions to party finances.
George Florides, a socialist former deputy finance minister who resigned his parliamentary seat last week, said: "Governments have shown no political will to crack down on tax officials or tax evaders."
An opinion poll published in the Ethnos newspaper on Sunday showed the conservative opposition leading the socialists by 1.4 points. Half of the respondents supported the medium-term package, but wanted some renegotiation, according to the poll.© The Financial Times Limited 2011
