New Greek Economy and Development Minister Dimitri Papadimitriou, who was recently recruited from a top academic position in the United States for the leftist Greek government’s Cabinet, blamed an “out-of-context” rendering of his statements on Thursday for a subsequent firestorm of criticism.
Initial reports had Papadimitriou saying that high tax rates, such as the ones traditionally imposed in Greece, and which were recently exacerbated in the recession-plagued country, don’t hurt competitiveness.
The statement attributed to Papadimitriou, who serves as the founding president of the Levy Economics Institute at lower New York state’s elite Bard College, was widely circulated throughout the day.
In a quickly issued statement hours later, the minister said that “although the level of taxation in Greece is high, which is the reason why our goal is to lower it (taxation) once we achieve the necessary fiscal space, it does not, however, comprise the decisive factor in the decline of national competitiveness, (a position) which the main opposition is promoting.”
He said the gist of his statement, made at an event hosted by the usually pro-business Hellenic Management Association (EEDE), was that this year’s tax hikes in the country (now at 29 percent) don’t make Greece less competitive than countries with similar rates of growth and economic problems.
By “similar” countries he mentioned previous bailout participants Portugal (29.5 percent) and Spain (25 percent), as well as slumping industrial powerhouse Italy (31.4 percent), and even Europe’s economic “locomotive”, Germany, which has a corporate tax rate of 30.2 percent.
