Ahead of Prime Minister Alexis Tsipras’s keynote speech at the Thessaloniki International Fair (TIF) on Saturday, aides are reportedly drafting a batch of handouts and tax relief measures that Greece’s next government will be obliged to see through.
In an anticipated speech that has been dubbed the government’s opening pre-election salvo, Tsipras will reportedly announce measures that will be introduced over a four-year period.
According to reports, Tsipras’s strategy entails announcing relief measures that will cost far more than the estimated 700 million euros of fiscal room for maneuver available to the government in 2019.
Sources say that if these relief measures are spread out over four years to 2022, the final cost will come to more than 3.5 billion euros – effectively binding whichever government is in to power to policies dictated by the SYRIZA-led administration.
For instance, if reductions in the highly unpopular ENFIA property tax are announced by Tsipras, these will be voted through immediately, but introduced only gradually from year to year.
A similar approach is also expected with regard to bringing down income tax and social security contributions.
Any changes to these tax relief measures and benefits, the reasoning goes, will not be without a political cost to any government.
However, Tsipras’s measures are being drafted under the shadow cast by the high yields of Greek bonds on international markets, which do not appear to have confidence in the Greek economy and see exposure to it as a risk.
Greece’s hopes to tap the markets after its bailout exit in August have been dashed by international turmoil sparked by instability in Turkey, Italy and Argentina.
It remains to be seen, however, if Tsipras can convince the markets that Greece is indeed on the right track, as his relief measures could also be seen as a sign that he intends to back down from the path of reforms – a scenario which will only make matters worse for the Greek economy.
Government sources have insisted that the measures Tsipras will announce will not derail the country from the path of reforms.