As expected, President Nicos Anastasiades has vetoed a bill passed by opposition parties to cut VAT on electricity bills from 19 per cent to 9 per cent across the board for an indefinite period.

In a letter received by parliament on Wednesday, the president argues that the bill approved on December 3 violated EU legislation, the separation of powers, and would also have a huge impact on the state’s finances.

Anastasiades said the indefinite blanket cut would derail the state’s fiscal obligations as it was estimated to deprive the government of €75 million annually.

“In essence, the vetoed law intervenes and alters the fiscal policy, which is subject to EU law, and goes against the relevant provisions of the constitution, namely, article 167 (which specifies how the state budget is prepared and approved),” the president said.

The president suggested to parliament to accept the veto and listen to the attorney-general and the finance minister.

Parliament can then accept the reasoning or reject it. In the event of a rejection, the issue goes to the Supreme Court, which will have the final say.

Before vetoing the bill, the cabinet approved a decree reducing VAT on household bills to 5 per cent for vulnerable groups and 9 per cent for the rest, for six and three months respectively, starting November 1.