For every 4 euros of austerity measures (taxes, social security contributions, pension and benefit cuts) this government has taken since it was voted into power, it has only returned 1 euro, and only to a small section of the population at that.
That 1 euro has been squeezed out of the middle classes with huge taxes and contributions just as confiscations soared, public investments declined and welfare benefits were abolished.
Figures show that besides the tough measures amounting to 9.5 billion euros, the government has also slashed public investments by 1.8 billion euros, which is likely to reach up to 2.3 billion in total to allow for the distribution of handouts worth 3 billion euros over four years.
In 2016 the government decided to reduce the Public Investments Program by 446 million euros to finance the “social dividend” handouts of 717 million euros. Yet in the same year it also brought down the income tax-free ceiling, raised the solidarity levy, slashed pensioners, increased value-added tax rates and cut the heating oil benefit not only to meet the fiscal targets agreed with its creditors, but also to distribute public money in the way it wanted.
The following year, 2017, investment cuts reached up to 800 million euros, while grants to the Agricultural Insurance Organization (OGA) and the Manpower Organization (OAED) were reduced by 150 million euros, the solidarity social income fell from 760 million to 550 million euros and the state’s contribution to main residence production plummeted from 100 million euros to zero. Those cuts led to the distribution of 775 million euros in handouts, on the back of a fresh increase in indirect taxes, the abolition of tax exemptions such as those for medical expenses, and the imposition of six new taxes, including those on coffee, landline phone services and the VAT hike on Aegean islands.
The same policy has been followed this year, with 820 million euros to be handed out in December, a few months before the general election, just as the Public Investments Program has seen spending of 1.3 billion euros less than planned.
The omens for 2019 are worse, as public investments are scheduled to be cut further, by 550 million euros, as the government intends to finance handouts of 910 million.