Greece needs investment, not consumption, minister stresses

Greece needs investment, not consumption, minister stresses

Despite the calls in the market for the reduction of taxation on consumption, such as value-added tax and Special Consumption Taxes, the government insists consumption is already high in gross domestic product terms and it is investments that should be bolstered instead.

Speaking to Kathimerini, National Economy and Finance Minister Kostis Hatzidakis stresses that “it is more investments that we want, not more consumption. It makes no sense to cut taxes that boost consumption. On the one hand, there is criticism because we don’t have enough investments while consumption is high, and on the other hand, they call on us to reduce taxes that increase consumption.” Such a policy, he concludes, would not be consistent with the government’s narrative of changing the production pattern in the direction of enhancing productivity.

Eurostat figures confirm the investment-consumption imbalance in the Greek GDP, compared to the eurozone average: Consumption represents 70% of GDP in Greece and 52% in the eurozone. In fact, the gap between Greece and the eurozone is growing over time. Meanwhile, investments amount to 14% of GDP, against 21% in the eurozone.

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