By Chrysostomos Tsoufis
Its maintenance escape clause and for 2023, albeit with restrictions, it loosens the hands of the government somewhat to extends the abolition of the solidarity levy and for them civil servants but also for retirees which are currently excluded. Why, at this time the necessary fiscal space has not been found, the government is not worried as it bets on the best budget execution and factor X which goes by the name of tourism.
In fact, she herself the Commission seems to be asking for additional tax cuts and specifically calls on the Greek authorities to re-evaluate its enforcement framework performance fee which brings to the budget 350 million €. The fee that is imposed regardless of the financial result of the company or the freelancer, hinders entrepreneurship After curbing investments and strengthening tax evasion, Brussels notes, without however suggesting where the money will come from.
There are of course other areas that need intervention. The comparative data show that Greece in relation to the Europe of 27 over-taxes real estate – 2.6% of GDP in Greece compared to 1.2% of the European average – but also consumption with 14.1% versus 10.8%, which feeds the debate about the need or not to reduce fuel taxes. On the other hand, the country is much lower in the taxation of workers with 17.5% compared to the European 21.5%.
But while Brussels, on the one hand, is turning a blind eye to further tax cuts, on the other demand larger primary surpluses in relation to what the government has in its plans.
The table is typical:
2023 2024 2025
Commission 1.3% 2.7% 3.4%
Ministry of Finance 1.1% 2.1% 2.3%
Undoubtedly, the negotiations between the two sides to set the budget targets will be particularly interesting …..
According to the Commission the primary surpluses will not fall below 2.3% until 2050 in order for the debt to remain viable! The reason is that they do not share the optimism of the Greek side for development. From 2025 the growth rate according to the Commission will fall below 2% while by 2030 it will have fallen below the unit!
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