Greek Socialists vow focus on reforms, no tax hikes

ATHENS Sat Apr 28, 2012 9:27am EDT

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ATHENS (Reuters) - Greek Socialist leader Evangelos Venizelos promised on Saturday that he would not slap new taxes on long-suffering Greeks and focus instead on reforms like opening up closed professions if he wins national elections next month.

Venizelos, Greece's finance minister until he took the helm of the Socialist PASOK party last month, has been trailing conservative rival Antonis Samaras in opinion polls as voters punish his party for backing unpopular austerity measures.

Outlining his party's economic program at Greece's largest bank headquarters in Athens, Venizelos said Greece would complete its obligations under its latest international rescue package by 2015 by spreading targeted savings of 11.7 billion euros ($15.51 billion) over three years instead of two.

"We can assure Greek citizens that returning to a normal life, to normal conditions- to decency, to safety - is near. It's almost upon us," he said to cheering supporters.

"The final countdown has already started. We have gone through the biggest chunk of a difficult and tough path. It's the final part that is left."

The once powerful PASOK, which came to power in 2009 with nearly 44 percent of the vote, is expected to take a measly 14-19 percent in the May 6 election.

The party has borne the brunt of voter fury over the sharp spending cuts Greece adopted under pressure from foreign lenders in return for two bailouts to prevent bankruptcy.

The tough measures have deepened a recession that is now in its fifth year, reduced private sector wages by a quarter last year alone, cut pensions and sent unemployment up to a record 21 percent.

Still, Venizelos has helped bring about a slight rebound in PASOK's fortunes - its support had dropped to as low as 8 percent in February - since taking over its leadership from former prime minister George Papandreou.

The former finance minister, who played a central role in securing a second 130 billion euro EU/IMF bailout and a landmark debt structuring this year, pledged no further across-the-board cuts to wages and pensions as long as Greece sticks to planned reforms.

"No Greek citizen should live in fear of the June measures," he said, referring to the next round of belt-tightening to be outlined by the new government in June. "We pledge and we assure them that no new taxes will be imposed.

"On the contrary, we will focus on structural reforms to have a leaner and less costly state, open up professions and markets and allow everyone free access to economic and production activity," he added.

TAX REPEAL

The conservative New Democracy and PASOK are the only two major parties supporting the bailout, and a renewed coalition between them is considered the only viable option for Greece to continue implementing essential reforms and retain the euro currency.

The raft of smaller left and right wing parties vying for third place oppose the bailout.

Samaras, the New Democracy chief and frontrunner in the election race, promised last week that if elected he would cut taxes and increase social spending, without missing budget targets set by international lenders.

Samaras, who has often criticized the terms of the bailout that saved Greece from bankruptcy, said he would spend 550 million euros ($726 million) to increase low pensions and support big families and cattle breeders.

Venizelos, in turn, promised a gradual repeal of a one-off "solidarity" tax imposed in previous years. He also said he would lower social security contributions by 10 percent to kick-start the economy and boost employment.

A property tax imposed on Greeks last year would be replaced by a different tax that would not be collected via electricity bills, he said. Sales taxes would be lowered for farming supplies and restaurants gradually, he said.

The total cost of these measures will not exceed 1 percent of Greece's GDP and can be absorbed as long as Greece meets its fiscal targets, he added. "Greece can be self-reliant. We Greeks are fighting and we will succeed." ($1 = 0.7542 euros)

(Writing by Deepa Babington; Editing by Mark Heinrich)

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