The context of the government’s interventions to strengthen savings, both by the citizens and by the State, was presented by the Minister of National Economy and Finance, Kostis Hatzidakis, speaking tonight at a Eurobank event on “Savings in Greece”.

Mr. Hatzidakis made special reference to the new supplementary insurance capitalization system (TEKA) which strengthens private savings and will soon, as he said, manage funds amounting to billions of euros, as well as to public savings, underlining the need for the country to maintain the improvement achieved in previous years so as not to undermine the efforts and sacrifices of citizens.

The minister stated that the strategy for savings moves along 3 axes, which are:

1. The increase of wealth with development policies. “We have made important steps. We are growth champions in the eurozone, unemployment has fallen dramatically, both the minimum and average wages have risen in recent years above inflation. We are not resting, we still have a long way to go in order to recover the lost ground and achieve real convergence with the European average”, said Mr. Hatzidakis.
2. The creation of a framework that will encourage the increase of private savings. Referring to the actions that have already been implemented, the minister underlined the emblematic reform of TEKA with the individual piggy banks. “TEKA, which completed 2 years of life this year, is a retirement savings vehicle for the new generation. To date, 370,000 young men and women have been insured, while the accumulated capital amounts to 145 million euros. But soon he finds himself managing billions. Being an investment blood donor for the Greek economy. And at the same time guaranteeing the best possible returns to the insured based on the risk they want to take”, he emphasized.
He also noted the initiatives implemented to consolidate the banking system: “You cannot even talk about savings without a robust banking system that citizens and businesses trust. The memories of citizens withdrawing their money from the banks and hiding it under the mattresses are still fresh. Where the future of not only the deposits but also the banks themselves was in doubt. We continue the effort so that Greek depositors have many, safe and efficient options for investing their money. In the next period, we will introduce regulations that will protect the Capital Market Commission and make the Stock Exchange more attractive. Thus offering households and businesses even more options for utilizing their savings.”
3. Maintaining the improvement in public savings. Mr. Hatzidakis pointed to the record reduction of public debt in relation to GDP, the restoration of primary surpluses a year earlier than predicted and the recovery of the investment grade.
Speaking about the proposals included in the relevant study of the bank, Mr. Hatzidakis stated the following:

– Regarding tax incentives: measures have been taken in this direction such as the reduction of tax on dividends to 5%, the establishment of a special tax rate of 15% for stock options, the abolition of taxation on the acquisition of interest-bearing Treasury bills. “The use of these incentives should be judicious, on the one hand due to budgetary constraints, on the other hand because often these incentives do not lead to an increase in total savings but to a ‘movement’ from certain savings products to others.

-For the so-called behavioral interventions, which aim to alleviate procrastination and strengthen citizens’ self-control. “Several of these proposals (e.g. applying the opt-out model to occupational pension funds, automatic transfer of amount from current to savings accounts, use of early withdrawal disincentives) are interesting and could be considered in the context of a wider dialogue”, he reported

-For the promotion of financial education: the national strategy for financial education was recently presented, which will be implemented rapidly and with funds from the Recovery Fund.

“Greece, concluded Mr. Hatzidakis, as long as there is a Mitsotakis government and this financial staff, is never going to return to the era of reckless waste and deficits. Serious fiscal policy is a pillar to support not only the budget, but also the country’s outlook. We had two problems, fiscal and balance. The first one we absolutely control and it is not going to escape us, we will only spend what we have and can afford. The second is linked to the productive model, we have taken important steps and are moving forward in cooperation with the business community and social actors, on a path forward for an economy that will have solid foundations and a corresponding perspective. Our conscience dictates it, it is a patriotic duty. As long as we tame populism, as long as we are serious and responsible, we will get results.”