Government sources say the prime minister’s speech in Thessaloniki this coming Saturday will have three main sections: Combating the coronavirus, introducing tax breaks and strengthening defense expenditure.
The tax breaks are set to be the most difficult part. If containing the consequences of the pandemic is inevitable and accepted by the European Union, which has eased fiscal restraints for that purpose, and defense spending is a matter of national importance, it is the application of the government program for tax breaks that is under the greatest pressure.
Even so, Athens is looking for ways to incorporate, even as temporarily for now, at least some of the main government pledges for tax reductions. Sources say that the main focus now is on social security contribution cuts and the reduction of the solidarity levy – i.e. measures to ease the burden on middle incomes.
A government source told Kathimerini that the relative easing of fiscal conditions for 2021 will allow Athens to proceed with such measures, taking temporary initiatives that could become permanent depending on the course of the crisis.
“The new budget will not have any costs carried over to 2022,” assured a Finance Ministry official, also citing the fiscal limitations that need to remain shelved for 2021, though not for 2022.
The measures were feverishly discussed over the weekend. The ministry has clearly taken a position in favor of a more conservative approach, with Minister Christos Staikouras repeatedly noting that the time for the permanent tax reductions of the New Democracy program will come after the pandemic has ceased to affect the economy: This condition remains uncertain, but the State General Accounting Office estimates that Covid-19 will continue to be a serious factor for at least the first few months of 2021.
Among the new measures to contain the economic impact of the coronavirus will be the supply of incentives for increasing employment, according to sources.
Therefore, besides the extension of furloughs and the “SynErgasia” labor subsidy program, the government wishes to offer a new, more optimistic prospect by supporting enterprises not only for maintaining their job numbers but also for creating new jobs.