The Minister of Finance expressed his optimism Christos Staikouras for the course of the Greek economy saying that the fiscal space that will be created will go to reductions in taxes and insurance contributions.
Specifically, the estimate that from 2022 onwards there will be fiscal space in Greece, which will be used mainly “for reductions, even more, of taxes and insurance contributions, especially in the middle class and lower incomes, but also for the exercise of economic of Health and Education “, said today, from the podium of the” Thessaloniki Helexpo Forum “of the 85th TIF, the Minister of Finance, Christos Staikouras, during a discussion, in which the official opposition was represented by the Head of Finance of the SYRIZA parliamentary group , Efi Ahtsioglou, presence of representatives of productive organizations.
Mr. Staikouras emphasized in detail: “Fiscal flexibility requires responsibility, seriousness, realism, insight and moderation. We utilize fiscal flexibility (which exists) through development measures, mainly through tax cuts and insurance contributions, most of which have permanent characteristics. At the same time we have a reasonable fiscal adjustment that comes – and will come – exclusively from the high rates of economic growth (…) This means fiscal adjustment in 2022, most likely with primary deficits and the specific year and with real surpluses realistic from 2023. When then agree at European level on the new fiscal rules (…), the fiscal space will tell you with relative certainty that there will be (…) With realistic primary surpluses, we have from 2022 onwards fiscal space, which will go mainly for reductions , even more so, of taxes and insurance contributions, mainly in the middle class and lower incomes, but also for the exercise of economic policy in both health and education “.
During the discussion, Mr. Staikouras, responding to a comment by Ms. Ahtsioglou on the need to create an inclusive economy, stressed that he feels “confident as a Greek government, because many of what was said before the elections, the citizens experience positively in their wallet “: among other things he mentioned the reduction of ENFIA by 22% and the income tax for individuals from 22% to 9% for the lower income groups, the reduction of the tax advance, but also of the insurance contributions by 4%, the abolition of solidarity contribution in 2021 and 2022, reduction of VAT, etc. “These concern the whole of Greek society, but mainly the middle class,” he underlined.
The Minister also reiterated that there are converging estimates that the Greek economy is recovering strongly this year and in fact with quality characteristics, adding that based on the first data the income of citizens improved in the first quarter (by 5.1% according to ELSTAT) and unemployment decreases. Mr. Staikouras reminded that the government seeks the country to achieve growth this year and recovery from 2022 onwards and it seems, in very realistic terms, that two thirds of the losses of 2020 are covered this year. “Red” loans in single digits in 2022, exit from enhanced supervision (of institutions) within the same year and achieve realistic primary surpluses and investment grade for the Greek economy in 2023.
The head of the government’s financial staff also promised that the government will continue to cooperate with the banking sector, but also to push it to continue the credit expansion, while in terms of debts created during the pandemic, recalled the provision for their regulation in 72 installments, arguing that there is no other country in Europe that offers such a generous scheme. Regarding the non-repayable advance, she pointed out that its terms have been greatly improved for businesses, but “if all the non-repayable becomes repayable, then the deficit this year will increase by billions of euros and public finances will be significantly burdened.
Ahtsioglou: The increase in numbers does not “pass” into the daily lives of households and businesses
Ms. Ahtsioglou spoke about extremely unpleasant conditions for businesses and a serious risk for new locks in SMEs, which employ 80% of the workforce in Greece and “face a problem of accumulated debts, for which no solution is given”. He added that things in the labor market are very bad, while he pointed out that inequalities are sharpening and the increase in numbers does not “pass” in the real life of households and businesses. He argued that “it will be an oxymoron for the government to speak in positive terms about the economy and for society to experience a new wave of impoverishment”, while he argued that, although there are indeed external factors leading to rising inflation, especially in the electricity market, There are also reasons that specifically concern Greece.
According to Ms. Ahtsioglou, until today there has been no intervention in terms of compliance with the conditions of competition in the Greek energy market and this has led to the creation of cartels and the explosive increase in prices: “and at this time the government still does not intervene to comply competition rules (…) and not to take serious measures to protect society from this forthcoming increase in the cost of living as a whole “he argued and wondered” what will the 150 million euros that will be allocated to subsidize the cost of electricity in Greek households, at a time when it has been estimated that the burden of price increases on the wholesale price of electricity will amount to 1 billion euros by March 2022 alone.
Ms. Ahtsioglou also estimated that if there is no “haircut” of the debts of the pandemic in companies and households, which are not strategic defaulters, “we will not be able to proceed further, so that in this development described by the Minister to participate most of society and small and medium-sized enterprises and that is why we insist that the economic policy pursued by the government is not inclusive. ” The Head of Finance of SYRIZA also claimed that in the Recovery Fund “almost nothing concerns public health, for which there are only sub-projects of negligible value and it is not possible after such a pandemic crisis that there is no serious investment in health, there is almost nothing for public education, for work only private training centers and for small and medium-sized enterprises exclusion from bank lending “.
What the representatives of the institutions said
The business community is “absolutely positive” about the prime minister’s announcements from the podium of the 85th TIF, according to the president of the Hellenic Industries Association (SVE), Athanasios Savvakis, who pointed out that the government responded to realistic and sensible business proposals, incorporating some of them in the new measures. He recalled the SBE’s proposals for the new development law, adding that companies today are experiencing a strange situation, facing huge increases in raw materials and energy costs, which create problems especially for internationally traded products. “This problem needs to be addressed immediately, I would say at the micro level and not so much at the macro level,” he said.
The president of the Central Union of Greek Chambers (KEEE), Giannis Chatzitheodosiou, described the 3.5 billion euros that will “fall” on the market as “clearly positive incentives” for businesses, noting, however, that although the incentives for households were very favorable , however “we did not hear anything about the media”. He said that despite the 150 million euros given to households for electricity, the price increases, which are just around the corner, will not be avoided, as there is no corresponding coverage for the industries and handicrafts that produce the products. He added that 85% of businesses are currently exempt from any form of lending, at a time when there is no country with a free economy that can operate without a banking system and described the interest rates on business loans as speculative.
“Indications that things are going a little better, sees from his side the vice president of PAPASTRATOS SA, Iakovos Kargarotos, who after reminding that the company has continued to invest for the last three or four years, to create new jobs and increase On the one hand, he expressed his concern about the changes that the elections in Germany and France may bring to the fiscal field, in Europe as a whole, but also to the ever-increasing cost of the climate crisis.
“The government has shown in unprecedented crises that it knows how to take prompt and effective action quickly.”
“I had the opportunity to develop and unfold the government’s plan for the next day, for the post-coronavirus era, but mainly to hear concerns,” said Finance Minister Christos Staikouras, in statements after the meeting with presidents and representatives of city bodies, at the TIF administration offices.
Commenting on the measures taken by the government over the past two years, he said: policy in the direction of continuous reductions in taxes and insurance contributions. That’s the key to the real economy and business. “
Asked about the content of the discussion that preceded, he noted that, “the institutions in the meeting and in the events that take place during the TIF reflect the reality. “They capture a situation in which the Greek government has significantly strengthened them, stood by them, built a safety net that still exists to support households and businesses.”
“Obviously, the institutions will request other interventions than those announced by the prime minister”, the minister clarified and noted that, “we are here to evaluate them in the future depending on the budgetary possibilities that the country has”.
The meeting with the Minister of Finance was attended by the President of the Hellenic Industrial Association Athanasios Savvakis, the President of the Exporters Association of Northern Greece George Konstantopoulos, the President of the Thessaloniki Chamber of Commerce and Industry Giannis Masoulis and the President of the Craftsman Thessaloniki Commercial Association of Thessaloniki Pantelis Filippidis.
Source of RES EIA
The article Christos Staikouras: “We utilize fiscal flexibility with tax cuts and insurance contributions” published in NewsIT .