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THESSALONIKI, Greece (Reuters) – Greek Prime Minister Alexis Tsipras unveiled on Saturday tax reduction plans and spending to heal years of painful austerity, less than a month after the bailout program funded by his partners European institutions and the IMF.
PHOTO: Greek Prime Minister Alexis Tsipras leaves the presidential palace after meeting with Greek President Prokopis Pavlopoulos (not shown) in Athens, Greece, on June 12, 2018. REUTERS / Alkis Konstantinidis / File Photo
Tsipras, who faces elections in about a year, has benefited from a political speech in the northern city of Thessaloniki to announce a wave of spending that would help repair the years of tightening the belt .
But he added that Athens was also determined to meet the budget targets and reforms promised to its lenders.
Greece has agreed to maintain an annual primary fiscal surplus – which excludes debt service costs – from 3.5% of gross domestic product until 2022. So far, it has exceeded targets budget and the economy has returned to growth.
"We will not allow Greece to return to the era of fiscal deficits and derailment," he told an audience of officials, diplomats and businessmen. .
He added that this year his main surplus target would be exceeded and, following a debt relief agreement in June, he could "safely plan for his future after the bailout". Government officials have put the margin of maneuver this year at 800 million euros.
Tsipras has promised a gradual reduction in corporate taxes of 29% to 25% compared to next year, as well as an average reduction of 30% of the annual unpopular property tax on homeowners.
MORE PENSION CUTS?
He also promised to reduce the main value-added tax rate by two points to 22% from 2021.
But he added that Greece could reach its primary budget surplus targets without implementing further pension cuts, a position that would be presented to the European Commission before next year's budget is reached. established in October.
The government has already passed legislation to reduce pensions next year – a deeply controversial measure in a country where high unemployment means that retirees are sometimes the main source of income for the family. This is also a group that has been targeted for discounts over a dozen times since 2010.
The leftist prime minister said he would reduce unemployment, restore labor rights and raise the minimum wage. And he said that the state would reduce or subsidize social security contributions for certain sectors of the labor force.
"Today, I can look into your eyes and tell each one of you that your insistence and your patience have borne fruit," he said, referring to the eight years of reforms under which the rescue plans of Greece.
Tsipras, who was catapulted to power in January 2015 after promising to put an end to austerity, but was later forced to sign a new bailout plan, hopes to boost his declining voting rates.
A poll by Marc agency published in Sunday's Proto Thema newspaper saw its Syriza party rank behind the conservative New Democracy party by around 10 percentage points.
Outside the place where he was speaking, thousands of people protested against an agreement to end a decades-old conflict with neighboring Macedonia over the name of the former Yugoslav Republic – a sensitive issue in the country. northern Greece.
Report by Renee Maltezou, George Georgiopoulos and Michele Kambas; Edited by Kevin Liffey
