In his first appearance as prime minister at the annual Thessaloniki International Fair on Sunday, Kyriakos Mitsotakis reiterated that his government will not seek an reduction of Greece’s ambitious primary surplus targets until the country has regained its “political credibility.”
“This does not mean I will not put it on the table and explain why these surpluses are outdated,” he told journalists at a press conference in the northern port city.
He added that Finance Minister Christos Staikouras will submit an official request to his eurozone peers on Friday for Greece to repay some of its loans from the International Monetary Fund earlier than scheduled.
Mitsotakis, who presented his government’s economic program for the coming year during a speech to businesspeople and politicians on Saturday, said the state of Greece’s public finances inherited by the previous leftist government “was not as rosy as it appeared.”
He defended a new wave of tax cuts announced for 2020, saying their fiscal impact has been calculated and will not derail the budget. He said the measures will be implemented in full and “will not surprise” the country’s creditors.
In his speech on Saturday, he promised to reduce both corporate and income taxes, to introduce a dividend tax cut and offer incentives for investment.
Corporate tax will be cut to 24 percent in 2020 from 28 percent currently and taxation on dividends will be halved to 5 percent.
The tax on income for those who earn less than 10,000 euros annually will drop to 9 percent from 22 percent. In addition, a solidarity tax introduced at the peak of the crisis and a levy on self-employed professionals will be scrapped.
Moreover, as part of a plan to boost the real estate sector, value-added tax on new constructions is to be suspended for three years.
During Sunday’s press conference, Mitsotakis said his government would make the Greek labor market more flexible while strictly enforcing employment rules. On Saturday night, thousands of workers demonstrated outside the trade fair, demanding better working conditions.
As regards speculation about the government’s intentions concerning the electoral law, which leftist SYRIZA changed to simple proportional representation while in power, Mitsotakis described the new system as “disastrous” and said his administration would pass a law to ensure political stability, noting that a party with 40 percent of the vote should be able to form a government.
As for constitutional revision, which was started by the previous leftist government, Mitsotakis said it would be completed by year-end, noting however that any changes to the electoral law would be submitted separately.
Questioned about a recent spike in migration flows from Turkey, Mitsotakis said the problem was “complex” and that the European Union should continue to show solidarity toward countries on the bloc’s external borders and provide funding to Turkey to stem illegal immigration in line with an agreement signed between Ankara and Brussels in 2016.
He stressed also, however, that it’s Turkey’s responsibility to crack down on migrant smuggling. “We have an increased influx. We can’t have 500 people arriving in 14 boats,” he said in reference to the increase in daily arrivals from Turkey. “It’s Turkey’s job to stop them.”
As for threats by Turkish President Recep Tayyip Erdogan to “open the gates” to a new wave of refugees if it does not receive international support, Mitsotakis remarked that his rhetoric “does not promote good-neighborly relations.” He added that he intends to meet Erdogan on the sidelines of the United Nations General Assembly later this month.
Meanwhile, the country’s slow-moving asylum process will be speeded up, he said, while also calling on EU member-states to shoulder some of the burden by taking in refugees, especially unaccompanied minors.
On the Parthenon Marbles, for which his government plans to request a loan from the British Museum, he stressed that the request for the loan to the museum would be phrased in such a way as not to jeopardize Greece’s ownership rights. The museum “will lose this battle, no doubt about that,” he said.
Asked whether he plans to try to amend the contentious Prespes name accord with North Macedonia, which his party vehemently opposed while in opposition, Mitsotakis reiterated that the deal is “damaging” but cannot be changed at will following its approval by Greece’s Parliament.
The government, however, intends to monitor its implementation closely, he said, pledging to protect Macedonian products and support the “Macedonian brand.”