Income tax threshold

Greece is on the 3% threshold

A spokesman for the International Monetary Fund on Friday expressed the IMF's opposition to the restoration of Greek pension bonuses and its insistence on the need for pensions to be further reduced along with cuts to the tax-free threshold for income. 

The maintenance of the tax-free threshold at its current level beyond 2020 will create a fiscal hole of 466 million euros despite the abolition of the countermeasures that had been scheduled for next year, while the European Commission is accusing the government of constantly overestimating its investments without implementing them.

The European Commission's spring forecasts for the Greek economy on Tuesday confirmed that the suspension of a planned reduction to the tax-free threshold is on the table, though it will not be possible without sacrifice on other fronts.

The gap between Greece’s lenders and the government widens, while the pressure for higher taxes rises since the government excludes any cuts in government spending. But, so long as both sides fail to reach an agreement, it seems that Greece will be forced to accept both tax hikes and cuts in  government spending.