Euclid Tsakalotos: Greece ‘creating fiscal space’ to lower taxes and boost social spending

“From now onwards, despite high primary surpluses, we are creating fiscal space that allows for lower taxes and significant spending for hospitals and schools,” Finance Minister Euclid Tsakalotos said on Tuesday.

In comments made to “ENA Channel” TV station in Kavala, Tsakalotos said the budget will generate an excess surplus and a social dividend this year and reiterated that, in relation to taxes, the prime minister has asked for a report on how the first 700 million euros included in the 2019 budget in advance can best be spent.

“Is it by lowering the special property tax? Helping small- and medium-sized enterprises and self-employed with social contributions? Or helping more on income tax? There are choices with pros and cons. No choice is the best, there is always something else you can do,” Tsakalotos said. The government’s goal, he added, is that citizens will gradually be able to practical improvements as things get better, in three or four years, with higher employment, lower taxation, more investments”. He invited the political opposition forces to join in a dialogue on how to best use this fiscal space.

Commenting on the country’s return to capital markets, Tsakalotos said that the Eurogroup’s decisions have opened up a “clear corridor” and noted that “if someone wanted to buy a bond for 10 years he can do it, because we know we have this corridor which is not just for foreign investors but for Greek investors as well, therefore it is in the hands of the country to take advantage of it”. He noted that Greece “could return to the markets or not in the next two months…We have given a mandate to the Public Debt Management Authority. It is not a political decision; from now onwards it is a technocratic decision, the authority will decide when the conditions are right in the markets…We are looking more in the long-term now. How to make this growth sustainable and to return back to 2008”.

Commenting on an agreement with FYROM, Tsakalotos said: “I think it is a good solution and that both sides have made a compromise that will help us politically”. He noted that “if we had this solution 10-15 years ago, many of the young people now unemployed could not be in unemployment, several enterprises with non-performing loans would be in a better condition and several enterprises that have been closed down would still be operating.”

Source ANA-MPA
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