Tobacco products: Athens pushes for lower taxation, while the European Commission considers a 139% increase in the Excise Duty!

Reactions from Athens and Finance Minister Kyriakos Pierrakakis astatine caller Eurogroup and Ecofin meetings are starring to milder and much gradual taxation hikes connected cigarettes implicit time, putting the brakes connected the steep terms increases projected by the European Commission successful its draught revision of the Tobacco Taxation Directive — a program that would person sent the mean terms of a battalion of cigarettes successful Greece skyrocketing to €7 oregon adjacent €28 (!).

Pierrakakis’s stance, on with emerging alliances with confederate European countries (notably Italy and Romania), appears to beryllium slowing down the plans of bluish nations (led by France and the Netherlands) to enforce the highest baccy taxes successful history.

Although differences remain, the last determination astatine the Council volition necessitate a compromise, since unanimity among each subordinate states is needed — and each state retains the close to veto. Given this, adjacent if important taxation increases are yet approved, a transitional play is expected. This means that the terms of a battalion successful Greece volition apt stay beneath €5 oregon €6 for rather immoderate time, adjacent to the existent mean of €4.60.

What the “northern” countries wanted

As To Vima revealed backmost successful July, the Brussels program for a caller “Euro-tax” connected baccy outlined the model of the directive pushed by the “northern bloc.” According to the document, the Commission proposes the steepest baccy taxation hikes ever: the Excise Duty would much than treble — from €90 presently to €215 per 1,000 cigarettes — a 139% increase.

Reports from To Vima besides revealed that Brussels was considering redirecting nationalist baccy excise revenues to the EU fund — thing present confirmed by the authoritative TEDOR proposal. Under TEDOR, billions of euros a twelvemonth would travel into EU coffers alternatively of nationalist budgets.

Pierrakakis’s alliances

Greece’s absorption was made wide astatine the archetypal Eurogroup and Ecofin sessions. Minister Kyriakos Pierrakakis warned that crisp taxation hikes promote smuggling, harm competitiveness, and destabilize the marketplace — emphasizing nationalist wellness arsenic a priority, but advocating a realistic taxation standard with longer modulation periods. He pointed retired that excessive taxation increases successful countries starring this inaugural (like France) person already caused monolithic losses — France reportedly mislaid astir €1 trillion (!) successful baccy taxation gross owed to smuggling successful 2024.

It’s nary coincidence that astir a period ago, Pierrakakis met with erstwhile Prime Minister Kostas Karamanlis, present president of the Cooperative Union of Greek Tobacco Producers (SEKE), to sermon the contented and imaginable solutions.

In immoderate case, Pierrakakis’s handling of the substance seems to person astatine slightest temporarily frozen the unit from France, the Netherlands, and the Commission for accelerated terms hikes — turning a method dialog into a governmental tug-of-war implicit the gait of increases. By aligning with Italy, Romania, and different confederate nations, Greece is helping signifier a beforehand successful favour of gradual implementation, arguing that abrupt unilateral moves would harm exports, investment, and nationalist revenue.

Still, the decision-making process volition beryllium agelong and difficult. Another large sticking constituent is the TEDOR connection itself: by making baccy excise an EU “own resource,” it would transportation a ample stock of revenues presently collected by subordinate states — astir €2.3 cardinal annually for Greece — straight to the EU budget, perchance dealing a further stroke to the country’s nationalist finances.