“A very clear trend is developing: Investors think that there is no more political risk in Greece and that we have left the crisis behind”, Prime Minister Kyriakos Mitsotakis states to Corriere della Sera, when asked to comment on the fact that Greek 10-year bond yields have been found to be even lower than those of corresponding Italian bonds within the month.
In the interview he gave to the Italian newspaper, on the occasion his visit in Rome today (where at 14.30 Greek time he is meeting the Italian Prime Minister Giuseppe Conte), the Prime Minister attaches particular importance to the government’s commitment to increasing the Greek people’s disposable income through reducing taxes and attracting investments for the achievement of higher growth rates.
“The question at this time is: who will be the pleasant surprise as far as growth is concerned in the euro area? This is the question we want to provide the answer to” he states.
“We want to achieve a political, financial, as well as institutional leap ahead”, Mr. Mitsotakis stresses, referring to the formation, for the first time, of an independent service for combatting corruption (National Transparency Authority). “Rule of law knows no exceptions” he stresses, adding that this change too is an opportune moment for attracting investments.
“Our first priority is for Greece to leave the times of the crisis behind once and for all and to achieve sustainable development for all, making the best of our country’s competitive advantages. We were clear in our election campaign program: we want to reduce taxes, to enhance citizens’ disposable income and make Greece an attractive investment destination both for foreign and for domestic funds”, Mr. Mitsotakis stresses.
By referring to the 2020 Budget, he underlines, among other things, reducing taxation on businesses from 28% to 24%, as well as the tax on dividends from 10% to 5%. “In addition, the institution of “non-domiciled resident”, internationally known as non-dom status for foreigners wishing to make Greece their tax residence, while our plan makes investments in research and development (R&D) investments more attractive from a taxation standpoint”, the Prime Minister points out.
A second wind of 2 billion euros in 2021, with tax reduction and supporting the vulnerable
There is special mention by the Prime Minister of the need to reduce primary surpluses starting in 2021, from 3.5% of GDP to 2.5% or even 2%, something which would free “more budgetary space of 2 billion euros for further tax reduction or expenditure increase, where deemed absolutely necessary, like the fight against poverty”.
Meanwhile, speaking of the prospects of a restitution of profits of European central banks by Greek bonds (ANFA and SMP) in 2020, reaching the amount of 0.7% of GDP, Mr. Mitsotakis notes that “their utilization for investment purposes, in a budgetary neutral manner” can be agreed upon with the country’s partners.
“3.5% of the target for primary surplus is meaningless today” the Prime Minister declares and explains his reasoning: “Primarily, the analysis of debt sustainability is completely different today, as we have much lower interest rates and a much higher growth rate compared to previous times, when this target had been agreed upon (under the SYRIZA government). But there is yet another thing, a political reason: This target has been set because there was no trust in the previous government. On the contrary, our government is widely trusted today, as there is no danger of our going back to the period of fiscal laxity”.
The immigration problem is a problem of Europe.
As far as the immigrant-refugee issue is concerned, the Prime Minister calls upon Europe “to stop burying its head in the sand”, pretending that it is a purely Greek, Italian, or Spanish problem, namely an issue concerning only the countries of first asylum. He stresses that the European Union should promptly review the Dublin system and ensure burden-sharing, especially as regards the assessment of applications for asylum – something which is at the core of the suggestion of Germany’s Minister of Interior Horst Seehofer. “If we have uniform rules that apply everywhere, there is no reason for applications to be examined only in Greece or Italy”, as he states.
Guarding of the external borders of the EU should be reinforced just as soon, with a stronger Frontex and a regulation making clear what this mission means. A third aspect of dealing with the immigrant-refugee issue, he notes, is the combatting the operative events of population movements, namely war and poverty, especially in Africa.
Mr. Mitsotakis points out that the government has changed the legislation for granting asylum, while also deciding on relieving congestion on the Aegean islands, by moving 20,000 asylum seekers inland. “All situations must be contained. This is a difficult problem but it is my job to put it under control” as the Prime Minister stresses, while also adding that meanwhile the government has been communicating with the local communities, with the aim of explaining the complicated situation.
Populists prove to be ineffectual
The journalist of Corriere della Sera notes that Kyriakos Mitsotakis is the first European politician who defeated populists, following the charge of populism in Europe. The Prime Minister, on his part, emphasises that he continues to be a relentless opponent of populism, which came with a huge cost to Greek society during the crisis.
“The country could have followed two different courses of action. It could have been devastated, by exiting the euro area and be led to national disaster. Or it could prove its resilience, its perseverance and its maturity. This latter scenario is the one which was realised. We are coming out of the crisis having been strengthened as a society” he notes, by describing the broader turmoil Greece has been in during these last years.
“In 2015 or 2016, certain people thought that Alexis Tsipras would stay in power forever, he was the “new blue eyed boy” of the European political establishment, and not just of Leftists. At that time, these were my thoughts: populists are ineffectual, they have no real solutions and at some point the Greeks will see it”, the Prime Minister states.
Mr. Mitsotakis claims that this last decade has had the effect of a maturing process on Greek society and that the election victory of New Democracy on the election of July 7th was partly the outcome of the experiences citizens had during ZYRIZA governance.
At the polar opposite of populist policies, the Prime Minister goes on, today’s government is prepared to take risks in fronts previously considered taboo and illustrates this with the enforcement of the anti-smoking law following years of beating around the bush and idleness. “At this moment, 75% of the people as with us on this, including the 70% of smokers. I believe we underestimate how much Greek society has matured in the course of the 10 years of crisis” Kyriakos Mitsotakis stresses.
