The Hellenic Federation of Enterprises (SEV) blasted the 2019 draft budget on Thursday as having “limited growth prospects,” saying in its weekly bulletin that it lacks a business-friendly policy mix.
The industrialists’ mouthpiece also accused the government of constantly depriving the private economy of resources through overtaxation, stressing that the planned reduction in the tax-free ceiling could finance a mix of social security contribution reductions and an increase in tax rebates to families with children.
“The first enhanced surveillance report by the European Commission after the end of the bailout programs generates concern as well as worries in the capital markets, which Greece will have to resort to sooner or later to renew the low-interest loans of the creditors when they mature,” SEV noted.
The federation added that the failure to attain the right policy mix for encouraging investors – a necessary condition for the growth of the economy – did not seem to concern the authors of the Commission’s report, who had almost nothing to say about private investments besides the fact that investments fell 65 percent from 2007 to 2017 and net investments remain negative (meaning that new investments do not even cover the ongoing amortizations), thereby reducing the fixed capital stock in the country.
The review of the measure to reduce corporate and dividend taxation from January 2019 and the postponement of its full implementation, SEV noted, coincides with a policy of expanding consumer spending and the constant deduction of resources from the private economy by its overtaxation. It further warned that as long as the productive economy is prevented from flourishing, the distorted framework of growth reliant on consumption and imports will remain in place.
SEV concluded that it is imperative the government finds the fiscal space to create incentives for well-paid labor, entrepreneurship, tax compliance, savings and innovation, stressing it is in that direction that the government and the European institutions need to cooperate.