The implementation of the permanent tax cuts included in the government’s program is being hampered by the impact of the pandemic on the Greek economy, according to senior officials on Wednesday.
What’s more, the need to cover defense spending, which has recently become imperative due to the tension with Turkey, has added a further strain.
As a result, the government’s economic program that will be unveiled at the Thessaloniki International Fair (TIF) in mid-September by Prime Minister Kyriakos Mitsotakis will only refer to 2021 and not beyond.
“Any announcements will concern only 2021 – not after,” Alternate Minister for Fiscal Policy Theodoros Skylakakis said, speaking to Skai TV, stressing that it is not possible to draft a macroeconomic scenario for after 2021 “as we do not know when and how the pandemic will end.”
He also insisted that it is difficult to assess the magnitude of the recession. “If you do not know the basics, how can you proceed?” he asked.
For his part, Finance Minister Christos Staikouras told Alpha Radio that planning is taking place on two levels.
“The first is the short-term, until the crisis interlude ends. This includes measures such as the third phase of the repayable advance, the reduction of rents, the extension of unemployment benefits, the Syn-Ergasia (job) program and the suspension of work,” he said, adding that the second level of planning concerns the permanent measures that will depend on the duration of the crisis.
“When the parenthesis of the pandemic closes, we will return to permanent tax cuts,” he said, noting that these two levels of planning will be elaborated at TIF by Mitsotakis.