Main opposition New Democracy (ND) president Kyriakos Mitsotakis on Saturday evening laid out his plan for a future Greek government under his leadership, emphasizing a turn towards lower taxes and a more business-friendly environment in the crisis-bedeviled country as the only way to exit the current impasse.
Mitsotakis, in the wake of consecutive opinion polls showing New Democracy, and himself personally, ahead of ruling SYRIZA and his rival, Prime Minister Alexis Tsipras, spoke in front of a mostly partisan audience in the northern city of Thessaloniki. Early September marks the opening of annual nationwide trade exhibition in the city, doubling as a venue for Greek political leaders to present their future plans, or to justify their past policies.
Highlights included Mitsotakis' promise to trim an unpopular property tax (ENFIA), which was instituted while he was a minister in a previous ND government, but was retained by the current leftist government even after it made its abolition a campaign “banner”.
In citing a “laundry list” of promises to reduce taxes, “red tape” and to boost entrepreneurship, he was careful to avoid “campaign-like” pledges, ones ubiquitous in most September political addresses at the Thessaloniki International Fair. Mitsotakis said tax breaks on several fronts depend on renegotiating lower primary budget surplus targets with Greece's institutional creditors.
One of the more symbolic indirect tax cuts he promised is to slash a monthly fee for the public broadcaster (ERT), slapped on every power bill in the country, by half.
The former minister, who is the son of ex-prime minister Constantine Mitsotakis and the brother of former Greek foreign minister Dora Bakoyannis, burnished his pro-reform and liberal credentials throughout the address, pointing to the creation of jobs in the private sector – and not the public sector – as the only way out of the crisis.
Mitsotakis began his nationally televised address by directly attacking the current coalition that governs the country, and Tsipras personally.
SYRIZA dominates the government and has a plurality in Parliament, yet it needs a junior party, in the this case the previously anti-memorandum rightist-populist Independent Greeks (AN.EL), to achieve a majority in Parliament and retain power.
He stepped up his attack by saying that Greece is now facing the specter of a political “deviation”, a reference to recent developments in the independent judiciary and the broadcast sector, which the opposition, and especially ND, are part of efforts by the leftist government to create a more regime-like system in its favor.
Besides promising a cut in the property tax by 30 percent over two years, he also said business taxes will be slashed by 9 percent, from today’s prohibitive 29 percent to 20 percent, with a tax on dividends also falling to 5 percent from 15 percent. In a nod towards the farm sector, which is important in rural areas and voters there, he promised a cut in VAT rates for farm sector supplies and the abolition of a very unpopular duty on wine, also recently imposed by the leftist government in order meet fiscal targets in the third memorandum bailout agreement.
Besides a reduction in primary budget surplus targets, which are enshrined in the current bailout agreement, he also said an economic recovery is a precondition for the tax cuts.
Along those lines, he promised lower social security contributions and a two-tier VAT rate system, 11 and 22 percent, from the current 24 percent rate.
The “price tag”, as he said, comes to 1.9 billion euros over two years in less revenue for state coffers, at which point he detailed where he plans to find the money to offset the gap. He referred directly on state spending cuts, namely:
- 200 million euros from reducing elastic state spending by 12 percent
- 400 million euros from improving results by state-owned utilities and enterprises belonging to the general state
- 150 million euros from the suspension in a plan to raise salaries for civil servants, something promised by the current government
Other spending cuts in his “less tax and less spending equation” will come from achieving reduced interest rates on Greek state T-bills, as he said; rationalizing state subsidies to pension funds; keeping a cap on the ratio of public sector hirings, one linked to the number of people who leave or retire from the state sector; as well as what he called the “structures” created by SYRIZA since early 2015, essentially Greek-style welfare system and handouts.
He reverted back to social matters towards the end of the address, emphasizing high-quality education and touching on the “law and order” issue.
Mitsotakis said a recent auction to sell four national broadcast licenses in the country “only aims to restrict pluralism, and to create a new vested interests system and a press landscape that is friendlier to the government.” He also charged that the current leftist government is ignoring Parliament and operating on the “margins of constitutional order”.
“From here, from Thessaloniki, a city that is a symbol of our people’s democratic conquests, I am sending Mr. Tsipras a clear message. Enough! New Democracy will not allow more markdowns on our already bruised political life. In a European Greece ‘Maduros’ have no place, even if some admire them,” he said in reference to the Venezuelan president and past expressions of solidarity by SYRIZA cadres to the radical socialist and increasingly authoritarian South American regime.
Mitsotakis, in the wake of consecutive opinion polls showing New Democracy, and himself personally, ahead of ruling SYRIZA and his rival, Prime Minister Alexis Tsipras, spoke in front of a mostly partisan audience in the northern city of Thessaloniki. Early September marks the opening of an annual nationwide trade exhibition in the city, doubling as a venue for Greek political leaders to present their future plans, or to justify their past policies.
He stepped up his attack by saying that Greece is now facing the specter of a political “deviation”, a reference to recent developments in the independent judiciary and the broadcast sector, which the opposition, and especially ND, charge are part of efforts by the leftist government to create a more regime-like system in its favor.