Prime Minister Kyriakos Mitsotakis on Saturday urged the Greek people to join him in a “pact of creativity, a pact of action and results, a pact of revival and progress” in his speech at the Thessaloniki International Fair (TIF) 2019.
Delivering the customary Prime Minister’s speech on the government’s economic policy at the Vellidio Congress Centre, from the same spot where he had offered the Greeks a “Pact of Truth” at a previous TIF, Mitsotakis said: “We do not forget, but we move forward” noting that the New Democracy government cared not only about the big things but also about the little things. “We will not hide away difficulties and challenges, but I will refrain from making comments about scorched land. The citizens know who hurt the country, it is our duty to heal those wounds,” Mitsotakis said.
“We are a government that does what it says,” the PM said, adding: “that’s the way we intend to move going forward.” He referred to measures already taken by the government, such as a reduction in special property tax, freezing of excessive pensions and offering more favourable repayment terms to millions of households and enterprises with debts to the tax agency and social insurance funds.”Greece is no longer the black sheep of Europe, it is a country with confidence that actively participates in European developments, a country that does not speak exclusively about its own problems, but seeks common solutions to our continent’s great challenges,” the prime minister said.
He presented a 12-month government plan that he said will be judged at the next Thessaloniki International Fair in 2020 and noted that, starting from this year and in the years to come – the TIF address will be a presentation of a 12-month plan, with medium-term directions and democratic accountability.
The economy and growth are the key for each step the country takes, a condition for security and prosperity, but also a central ideological difference with our political opponents, Mitsotakis said, reiterating that he will follow a prudent fiscal policy, with each measure fully budgeted.
“At the same time, however, we will focus dynamically on investments for the production of new wealth and to boost employment,” Mitsotakis said, adding: “with a bold wave of reforms we will win strong credibility and with the right timing and our positive results as a weapon, we will claim more realistic, annual primary budget surpluses”.
“We unblocked investments stuck for years because of bureaucracy and political indifference. We will immediately promote the privatisations of DEPA, Hellenic Petroleum and Athens Airport (for the latter it is a matter of days to begin a process to sell a 30 pct share owned by the Greek state). A restructuring plan for the Public Power Corporation (PPC) is underway and don’t forget that – after four years – we fully lifted capital controls in the country,” Mitsotakis said.
The PM presented the main policy actions designed to boost economic growth, which are investments, labour relations and a productive digital state.
The government will maintain a current tax-free allowance and lower tax rates for annual incomes of up to 10,000 euros to 9.0 pct from 22 pct currently. A tax on new farm vehicles will fall to 10 pct, while the government will soon table new legislation on agricultural cooperatives in Parliament. The government will also lower a corporate tax rate to 24 pct from 28 pct currently and a dividend tax to 5.0 pct from 10 pct. It will free VAT on new buildings for a three-year period and offer a 40 pct discount in spending for renovation and upgrading of buildings. The government will also postpone a capital tax on real estate.
“We will abolish a solidarity contribution tax and an extra charge on professionals and self-employed in the medium-term, not in 2020. In 2020 we will offer a 2,000-euro subsidy for each new child born with the exception of very high income categories. All baby items, child seats and motorcycle helmets will be taxed at a lower VAT rate of 13 pct. We will offer an additional tax exemption of 1,000 euros per child and a monthly financial support of 180 euros for each position in kindergartens. The government will preserve payment of an extra subsidy to pensions. This will be paid in the end of 2020,” he said.
Mitsotakis noted that the government was rapidly promoting several dynamic business plans in 2019, which will offer public revenue to the country and job positions with fair pay to citizens. In tourism, several new investments are promoted, with flagship projects those in Kassiopi, Afantou and Elounda. “The government published three crucial joint ministerial decisions for the Hellinikon project, the park, the coastal front and the casino,” the PM said, adding that a fourth decision was expected this month on building zones, while an international tender for the casino will be launched on October 4. “This means that the state will immediately collect the advance payment of 300 million euros. Works in Hellinikon will begin in early 2020. The project is budgeted at 8.0 billion euros. The project is expected to create 10,000 jobs during construction and 75,000 after completion of the project,” he said.
The PM also referred to investment projects by Eldorado Gold and Cosco. “We discuss with Eldorado a revision of the concession contract to pave the way for a new investment in Thrace. The project is budgeted at 1.0 billion euros, with 1,900 job positions during construction and more than 900 after completion of the project. Cosco also submitted a new plan to expand sea cruise piers, new infrastructure and building hotels. The project is budgeted at more than 800 million euros, with 2,500 job positions during construction and 3,000 after completion of the project.
“Growth for All” means also the development of small- and medium-sized enterprise. Because success is when, alongside a big project, a small shop also raises its revenue,” Mitsotakis said. He announced the immediate implementation of more favourable terms to attract strategic investments, simplifying environmental licensing based on European standards and facilitating the installation of business parks. The government will set up an Infrastructure Record to better inform and attract investors, along with a Single Digital Chart and defined use of building and ownership.
“Our goals is to protect workers, to support full-time employment and create several new job positions,” Mitsotakis said, adding that the labour market was over-regulated and that a strict control in the name of protecting workers brings the exact opposite results.
“The country needs a modern, secure and flexible labour market, with rules for employers, strict fines for breaching labour legislation, but with conditions improving competitiveness,” the Prime Minister said, announcing a gradual reduction of social insurance contributions from July 1, 2020, which will reach up to five points by 2023. “By the end of 2020, social insurance contributions will be lowered by around one point, but only for full-time workers,” he noted.
Mitsotakis announced a restructuring of supplies and a single administration in state hospitals, a policy combined with the development of tele-medicine to save money. Medical tourism is raising public revenue, he said, announcing the hiring of 2,000 personnel, mostly nurses and 2,000 new general doctors in the state health system.
The PM stressed that the protection of citizens was a self-evident obligation of the state and a precondition for growth. He announced the hiring of 1,500 new policemen by the end of the year and the renewal of police cars in 2020.
Digital progress will be the fourth area by which the ‘Growth for All’ programme will be judged, Mitsotakis said and explained that the 21st century demands, primarily, a digital state that is fast, efficient and productive for the benefit of citizens. Mitsotakis pledged that Greece will improve to match the EU average in digital penetration within the four-year term of his government, starting with a national framework to combat bureaucracy using e-governance as a tool. A first step will be to introduce a Bureaucracy Observatory to record all administrative burdens resulting from legislation or administrative decisions, on enterprises, citizens and civil workers. A tender for a new type of IDs will be launched before the end of the year, offering “long-distance identification” and the capability to access public services from home or work with safety, he said.
The prime minister also referred to the government’s plan for Thessaloniki and northern Greece, such as the concession of 760 stremmata (one stremma equals 1,000 sq.m.) owned by the Greek state to the Alexandria Innovation Zone. Another real estate asset, in Perea, will host the “Thess/Intec” an innovation park which will be funded by private initiatives.
“Our priority is to protect and enhance Macedonian products with the creation and international certification of a collective brand for these products,” Mitsotakis said, adding: “It is what will declare, without any doubt, their quality and origin towards any competitor. This model has been successfully tried in Cretan products. It will give a new boost to northern Greece’s products in foreign markets”.