Athens Digest 10.07.2018

• PM Tsipras unveils plans for post-bailout

• Premier insists pension cuts not necessary and announces tax breaks and handouts

• Poll: 10.9-percent lead for Conservatives over ruling Syriza

 

# Prime Minister Alexis Tsipras, who is seeking re-election next year, unveiled his plan for Greece over the next five years at the 83rd Thessaloniki International Fair (TIF). The aim he said is to reduce unemployment to 10-percent, attract investments and boost labor rights. Tsipras announced tax breaks and other relief measures. However he sought to allay the concerns of Greece’s lenders, pledging that Greece will stick to agreed fiscal targets and reforms in the post-bailout era.

# Tsipras announced a series of tax breaks and relief measures claiming that in the three-year period spanning 2019-2022 Greece has a fiscal space of EUR 3.5bn. The measures refer to:
Property Tax: An average 30 percent reduction in the unpopular ENFIA annual property tax on homeowners. The measure will be implemented in two phases: the first in January 2019 and the second in January 2020.
Social security contributions: A reduction of up to 35-percent in social security contributions of self-employed professionals with an income over EUR7000 as of January 1, 2019. Moreover contributions for auxiliary pensions and one off lump sums for doctors, engineers and lawyers will be reduced to the minimum limit in effect today.
Corporate taxes: The gradual reduction of corporate tax by 4-percent,from 29-percent to 25-percent, until January 1, 2022, starting from January 1, 2019.
Rent subsidies: Rent subsidy with amounts ranging from EUR 70 to 200 / month, with income criteria, for at least 300,000 families as of January 1, 2019.
Retroactive payments: All retroactive payments to be made in 2018 to uniformed officers, judges, lawyers, academics totaling almost EUR 1bn.
Home help program: Reinforcing and make permanent the “Help at Home” Program for the elderly and the disabled, with the immediate recruitment of 3,000 permanent staff. To be implemented within 2019.
Special education: Boosting Special Education at public schools with the immediate hiring of 4.500 teachers and skilled staff.
Business tax on farmers: Abolition of the business tax for farmers’ cooperatives and for inactive enterprises as of January 1, 2019
Insurance subsidies for young workers: Subsidizing all insurance contributions for young employees up to 25 years in the private sector over a two-year horizon. 50-percent from January 1, 2019 and 100-percent from January 1, 2020.
VAT cuts: Change of VAT rates by a reduction of two units of the large, from 24-percent to 22 percent and one by the small, from 13-percent to 12-percent as of January,1 2021.
Minimum wage hike: Procedures will begin to raise the minimum wage and abolish the sub minimum wage for people up to the age of 25. From early 2019.
Health budget: Increase up to the European average within five years

# Meanwhile, Tsipras said that the pension cuts that Greece must implement on January 1, 2019, were imposed by the IMF and are not fiscally necessary. “We will explain that this measure (on pensions) is not a structural one and is against growth,” he added. According to Kathimerini newspaper, the EC has examined the prospect of suspending the cuts until April. Pension reform will be discussed during meetings about the 2019 budget in Athens between institution representatives and the government- the first since Greece exited the bailout.

# The first public opinion poll since Greece’s bailout exit and the devastating wildfires in eastern Attica that left 98 people dead showed that opposition New Democracy has a 10.9-percent lead over ruling Syriza. According to the poll conducted by Marc on behalf of the To Proto Thema newspaper, 29.9-percent said they would vote for ND as opposed to 19-percent for Syriza. Yesterday’s poll gave extreme right Golden Dawn 6.9- percent, ahead of KINAL on 6.4-percent and the Greek Communist Party on 6- percent. 78-percent said the government was responsible for the high death toll of the wildfires. 70 percent said they oppose the name deal signed by Greece and the Former Yugoslav Republic of Macedonia in June, while 82-percent said they believe Greece still remains anchored to memorandums despite its August exit.



On Our Radar: US honored country at Thessaloniki Fair as Greek-American relations deepen
US Commerce Secretary Wilbur Ross, who is in Greece for the 83rd Thessaloniki International Fair (TIF), he underlined that Greek-American relations are in their best shape in years. In his address on Saturday at the TIF where the US is the country of honor, he said the fair will be the “launching point for even more growth of the U.S.-Greece relationship, and a further strengthening of our commercial, defense and cultural ties.” He also noted that energy developments in the region and the construction of gas pipelines may render Greece a regional energy hub. Ross also hailed the deal to upgrade Greece’s fleet of F-16 fighter jets by the US