Greek PM keeps cards closed on tax reductions

Prime Minister Kyriakos Mitsotakis left his papers closed for the interventions of tax reductions and reliefs, during a press conference he is giving at this time.

“The de-escalation of taxes for the next 4 years, if the people trust us, will be based on the financial margins”, he noted.

Furthermore, he noted that the temporary reduction of indirect taxes “personally does not agree with me, citing as an example countries that implemented it and lost revenue, while the reduction did not reach consumers.

In addition, he left a mark on some interventions saying that some tax reduction measures will have permanent features.

“We’ve actually seen the worst”

Responding to a question about high prices and profiteering, the PM noted that we have seen the worst.

More specifically, the prime minister said: “I am not naive, there will always be businesses that will try to take advantage of the crisis. The Household Basket offered transparency to essential products. Consumers are more aware and it makes sense. They do market research. We have control mechanisms and we are exhausting the possibilities. Inflation will decelerate further in the coming months. I believe we have seen the worst.”

The prime minister then pointed out that a provision on obscene profit exists and is strictly enforced.

Minimum wage

Regarding the imminent increase in the minimum wage, he avoided pre-empting the ministerial decision of the Ministry of Labor, which will be implemented from April 1. “The increase that we have legislated under the New Democracy government is significant as we have gone to 713 euros. I believe that the next raise will be important and will not undermine the competitiveness of businesses”, said the prime minister, adding that the increase in wages has to do with the productivity of the economy.

Investment grade

The prime minister described it as entirely possible to regain investment grade in 2023, noting that we have achieved 11 upgrades and are one rung away from regaining investment grade. He added: “Investment houses and markets are waiting to see what happens in the elections. If the Greek people will trust again, it will be a matter of time – a few months – to obtain the investment grade”. In fact, he left a tip for main opposition SYRIZA, saying characteristically: “If, for any reason, there is instability, or the election of a government with a different policy, we will not see an investment grade even with binoculars”. He also said: “If the citizens trust us again, it will only be a matter of time before we get it. I don’t know what our political opponents would answer.”

We maintain reserves

Beyond that, Mr. Mitsotakis said “We are optimistic about the budget’s course, but we must be careful because crises are lurking everywhere. We prefer to keep fiscal reserves” and he added that “We will not have the data for the state budget before the end of February. Before we rush to talk about the next government measure or the one after that, let’s press pause and see the already important interventions that have already been launched. Like for example the market pass”. He also recommended “Restraint and patience, we are optimistic. If life has taught me something in these three and a half years, it’s that you have to be careful referring to the multiple judgments”.

Investments

The prime minister added that there is great interest for investments in Greece, something he also found in Davos. “In 2020, before the pandemic broke out, the interest in Greece in Davos was theoretical, as it was accompanied by a doubt, given that the country was coming out of the 10-year crisis”, he said, adding that “Now, the doubt it doesn’t exist anymore”, talking about the improvement of the business climate”.

“The best answer as to whether the competitiveness of the economy has improved is given by those who choose to invest in the homeland, while a few years ago they would not have even thought about it,” noted the prime minister, responding to a question related to the increase in the current account deficit.

In addition, he said that “If you compare with 2010 you will find that the economy has become much more extroverted and competitive. Today we export 41% of GDP in goods and services and obviously this does not only concern tourism and shipping”.

“But there are other steps because the fiscal shock of a decade was too big. The crisis we went through was unprecedented. From 2015 to 2019 growth was 0.5% per year, 1/4 of EU growth. This gap is covered at rates of four times higher than the EU average”, noted Kyriakos Mitsotakis.

The prime minister, after being asked about the change in the production model during these four years, pointed out that “it has changed a lot but there is a way forward. The Greek economy is now more extroverted.”

Cash available

Kyriakos Mitsotakis, when asked about cash, said characteristically, I have a “pillow” to sleep on. He stressed that Alexis Tsipras should not be proud of the “cushion” left by his government, as it came from the overtaxation of the middle class and its existence was imposed by lenders because they did not trust the SYRIZA government.

“The cash available today is 39 billion”, informed the Prime Minister.

Tax evasion

“We are concerned,” replied the prime minister to a question about tax evasion and benefits. “However, we have no other way than the tax declarations. We have better tax compliance. I heard complaints from professionals. It is possible that they did not declare their real incomes. We have made important steps with new technologies”, noted Kyriakos Mitsotakis.

Recovery Fund

Answering a question about the Recovery Fund, he noted that the resources are not for the few. “The money will not go to a privileged few. Above all, we support small and medium-sized enterprises, through Exekhoono, for example. It is money that ends up in the entire business world. The same applies to the NSRF”, said Kyriakos Mitsotakis.

Bank disinvestment and auctions

“When we started, non-performing loans were 40%, now they are 10%,” said Kyriakos Mitsotakis, while emphasizing that the borrower support programs were extremely successful.

The prime minister emphasized that the government has done enough on the issue, “you know our interventions”. “The numbers were not what we expected but they are better than in the past. Direct settlements have also increased so that we do not end up with forced executions [evictios],” noted Kyriakos Mitsotakis.

“Banks have the ability to increase deposit rates. And there is room for competition in lending. Consistent customers should not be forgotten by the banks”, requested the prime minister.

He also stated that “There is no strategic reason for the state to control a percentage of the systemic banks”, adding that the Hellenic Republic Asset Development Fund has drawn up a disinvestment strategy because “it was never the intention of the state to have a large percentage in the banks and this arose as a necessity from the third unnecessary Bank recapitalization”.

Remuneration policy

“I also read various economic analysts and pundits. Our policy supported society in unprecedented circumstances. I am proud. We took the risk to keep society afloat,” said Kyriakos Mitsotakis.

“It will be taught as a public policy tool in the future, I hope it doesn’t sound presumptuous. I am deeply liberal but I am in favor of state intervention when we have risks of a systemic nature,” the prime minister stressed. In fact, he used Britain as a negative example, where both the pound and the government of Lisa Truss collapsed.

“We protected jobs and had a quick recovery. We don’t have a US model here,” the prime minister added.

Reduction of insurance contributions

When asked about the possibility of reducing insurance contributions, he replied: “Yes, it is in our intentions to reduce insurance contributions. We will speak in more detail in the presentation of our program”, while he added that “When stability is not at risk, we proceed with temporary, targeted measures. The extraordinary taxation of the refineries is also a temporary measure,” explained Mr. Mitsotakis.

Direct assignments

When asked about the direct assignments in the current four-year period, Kyriakos Mitsotakis noted that: “I don’t have the same image about the direct assignments. But if anyone thinks that during the difficult period with the coronavirus that we could choose another path, come and tell me. Let’s be realistic and honest.”

“I’m not saying everything went right. It needs investigation. I never have difficulty answering directly and accepting criticism. When the subject of wiretapping came up, I immediately made a statement, Mr. Tsipras still hasn’t spoken about the suitcases with the money. However, there was no country that did not proceed with such procedures, for vaccines and masks and so on,” said the prime minister, throwing a barb at the official opposition party.

Hydrocarbon Research

Regarding hydrocarbon research, Mr. Mitsotakis noted that “We are not looking at other plots for hydrocarbons”, estimating that in 2023 we will have a very good picture of whether there will be deposits to exploit in the Peloponnese and Crete.

However, he did not fail to mention that investments in natural gas are “nevertheless still viable and financeable. We are not putting the brakes on green energy, however we will also need natural gas,” he said

Regarding hydrocarbons, “this discussion goes back many years when the ND-PASOK joint government took the initiative in 2012-2014”, he said, to add that “This effort was completely frozen under the four-year SYRIZA government and now it begins to be a need for the country to find alternative sources of energy for natural gas”.

High prices the biggest problem

The prime minister considers high prices to be the country’s biggest problem, as he said after receiving a question. Kyriakos Mitsotakis noted that in relation to wages, businesses can do more. He noted that “they can also offer other benefits, stock options for example. So we encourage them. As well as benefits in kind. We will also have a new payroll for civil servants in 2024.”

He even talked about the relationship between life and work, promoting teleworking where possible or creating nurseries for employees so that they don’t have to worry about taking the child with them to work if necessary.

New salary in 2024

The prime minister noted that there will be a new uniform salary scale with significant increases from 2024, noting that there have already been interventions in special groups of public employees, such as doctors, but also the productivity bonus linked to the evaluation in the public sector, which is progressing.

Reversal of brain drain

The brain drain has begun to reverse, said Kyriakos Mitsotakis, while he emphasized that businesses have begun to accept resumes from abroad from young people who want to return.

“We also abolished the parental benefit tax up to 800,000 euros. Many jobs today pay well above the minimum wage. I see with great joy the young going into shipping. You are a new captain and you make 10,000 a month. We should create good wages for everyone, for the average person,” the prime minister underlined.

“There is no magic formula” for inflation

Kyriakos Mitsotakis, after being asked about the effectiveness of the measures, emphasized that there is no “magic formula” to deal with the “monster” of inflation. “If anyone has it, let them come and tell me.”

Inflation is lower than the European average, food inflation is a little lower than Europe (15 vs. 15.4%), while he noted that if anyone has objections to ELSTAT, they should direct them to it.

He defended the “Household Basket” again, while emphasizing that “there are no magic savings trees, while the horizontal VAT reductions do not help. Who will we tax next? If Mr. Tsipras implements these, he will not even last 44 days that Ms. Tras did.”

Farmers

Kyriakos Mitsotakis was asked about the farmers’ mobilizations that have been announced and he said: “Mobilizations always happen, we have a good atmosphere.”

The rural economy, the prime minister stressed, will be helped by the Recovery Fund. “This year in a range of products we had very good prices, in oil for example. It is an important breath”, underlined Mr. Mitsotakis.