Greek PM set to outline tax cuts, structural reforms

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. (File/AFP)
Updated 07 September 2019

Greek PM set to outline tax cuts, structural reforms

  • Mitsotakis says his government is confident of achieving a primary budget surplus of 3.5 percent of GDP in 2019 and 2020
  • Mitsotakis is expected to reiterate that corporate tax will be cut to 24 percent in 2020 from 28 percent currently and to 20 percent in 2021

ATHENS: Greece’s prime minister is expected on Saturday 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 percent 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 percent in 2021, after Athens gains credibility by implementing reforms such as modernizing and making its state more efficient and cutting down on red tape.

In Saturday’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 percent in 2020 from 28 percent currently and to 20 percent in 2021, with taxation on dividends to be halved to 5 percent, 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 percent 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 Saturday’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.


France backs calls for EU sanctions on Turkey

Updated 19 September 2020

France backs calls for EU sanctions on Turkey

  • Cypriot officials insist the EU shouldn’t set a ‘double standard’ by imposing sanctions against Belarus for alleged voter fraud while avoiding doing so when Turkey carries on its exploration at the expense of EU members

JEDDAH: France on Friday backed Cyprus’ calls for the EU to consider imposing tougher sanctions on Turkey if the Turkish government won’t suspend its search for energy reserves in eastern Mediterranean waters where Cyprus and Greece claim exclusive economic rights.

French Minister for European Affairs Clement Beaune said sanctions should be among the options the 27-member bloc considers employing if Turkey continues to “endanger the security and sovereignty of a member state.”

“But we consider that the union should also be ready to use all the instruments at its disposal, among them one of sanctions, if the situation didn’t evolve positively,” Beaune said after talks with Cypriot Foreign Minister Nikos Christodoulides in Nicosia.

A European Parliament resolution has called for sanctions against Turkey unless it showed “sincere cooperation and concrete progress” in defusing tensions with Greece and Cyprus.

Marc Pierini, a former EU ambassador to Turkey and now analyst at Carnegie Europe, said the resolution reflected the views of a democratically elected parliament from across the bloc. “This is not ‘country X against country Y,’ it is the aggregated view of the European Parliament,” he told Arab News.

EU leaders are set to hold a summit in a few days to discuss how to respond to Turkey prospecting in areas of the sea that Greece and Cyprus insist are only theirs to explore.

Turkey triggered a naval stand-off with NATO ally Greece after dispatching a warship-escorted research vessel in a part of the eastern Mediterranean that Greece says is over its continental shelf. Greece deployed its own warship and naval patrols in response.

Greek and Turkish military officers are also holding talks at NATO headquarters to work out ways of ensuring that any standoff at sea doesn’t descend into open conflict.

Greek Foreign Minister Nikos Dendias said Turkey’s withdrawal of its survey ship and warship escorts was a positive step, but that Greece needs to make sure Ankara is sincere.

He said a list of sanctions will be put before EU leaders at next week’s summit and whether they’ll be implemented will depend on Turkey’s actions. “I’m hoping that it won’t become necessary to reach that point,” Dendias said.

Cypriot officials insist the EU shouldn’t set a “double standard” by imposing sanctions against Belarus for alleged voter fraud and police brutality while avoiding doing so when Turkey carries on its exploration at the expense of EU members.

Meanwhile, the EU is set to announce sanctions on Monday against three companies from Turkey, Jordan and Kazakhstan which are accused of violating a UN arms embargo on Libya, diplomats told AFP.