ATHENS, Sept 7 — Greece’s prime minister is expected today to detail tax cuts for companies strained by years of austerity, while also promising pro-business reforms aimed at convincing lenders to ease the nation’s fiscal target from 2021.
Conservative premier Kyriakos Mitsotakis was elected two months ago, replacing his leftist predecessor Alexis Tsipras on pledges to revamp Greece’s economy a year after the end of its third international bailout.
Greece remains under financial surveillance to ensure it meets its fiscal targets, and Mitsotakis says his government is confident of achieving a primary budget surplus — which excludes debt-servicing costs — of 3.5 per cent of GDP in 2019 and 2020, as agreed with European lenders.
He hopes, however, that foreign creditors will be persuaded to lower that target to around 2 per cent in 2021, after Athens gains credibility by implementing reforms such as modernising and making its state more efficient and cutting down on red tape.
In today’s speech at an annual trade fair in the city of Thessaloniki, Mitsotakis is expected to reiterate that corporate tax will be cut to 24 per cent in 2020 from 28 per cent currently and to 20 per cent in 2021, with taxation on dividends to be halved to 5 per cent, government officials said.
He is also expected to announce measures to help ease the tax burden for certain groups of austerity-hit taxpayers and offer incentives to boost the construction sector.
Securing leeway from creditors on the primary budget surplus target would give Mitsotakis’s administration scope to implement the tax cuts and boost public spending to spur growth in an economy that shrunk by a quarter during a long debt crisis.
Greece has been exceeding its fiscal targets in recent years and European lenders expect the economy to grow by 2.2 per cent in 2019.
The government also wants to resume talks with lenders on repaying earlier loans from the International Monetary Fund, officials said, finishing off a project the former government had started. Senior euro zone officials were neutral to positive this week to the plan presented by their Greek peer.
Mitsotakis visited Germany, France and the Netherlands in recent weeks to appeal to his European counterparts to support his campaign and also invest in Greece.
The prime minister is also expected during today’s speech to reiterate a government plan to revive a stalled gold mine project.
Other initiatives that the government is keen to accelerate include a long-delayed tourist investment at a disused Athens airport and the sale of a stake at Greece’s biggest oil refinery Hellenic Petroleum. — Reuters