My fellow citizens,
Once again, I am addressing to you as we stand at the end of the first round of our fight against the pandemic. But also at the dawn of a new era, with a focus on the economy and the society alike.
Because today I am presenting you with the Government’s plan for the coming months. I will discuss our plan to safeguard jobs; what tax deductions will be launched; how to increase market liquidity to support all businesses, large and small.
And I am also going to discuss our action plan to stimulate the tourism industry, which is so vital to our country.
To date, we have been able to mitigate the spread of the virus. We have shielded public health and limited losses. We have supported citizen income and kept our businesses afloat. We have set our country as an example in the face of the health crisis. And we have all achieved this together.
Thank you for remaining responsible now, as the restrictive measures in place are gradually being lifted.
With the same maturity and discipline, we are called upon to turn the coming months into a stepping stone that will help us move from defending our health to attacking aiming at progress. To gain thus both the time and ground lost to the health crisis storm.
I have never concealed the fact that the battle for life would have a heavy economic impact. After all, the cost has already proven huge all around the world. The unemployed in the United States have exceeded 30 million. In Europe, too, production and demand alike are plummeting. We are talking about a global economic crisis, the like of which we have not seen for three generations.
For Greece especially, the risk is possibly even greater. Not only because the crisis is hitting key industries, such as tourism and restaurant business. But also because the pandemic has been a stumbling block in the country’s course, at a time when Greece was rapidly entering a path of development.
January and February were great months for the economy. But they already seem to be so far away. Therefore, we must pick up the thread of progress once more. So that Greece may become not only an example in the defence against the Coronavirus, but also a model State for the return to prosperity.
The trust that has developed between citizens and the State will be a valuable weapon. The same applies for the pace of society, guided by an organised Government plan. In this context, we will move from putting our health first, while supporting the economy, to reinforcing the economy, while staying constantly vigilant about our health.
This will facilitate the Government’s autumn plan on the return to the path of robust growth. So that in 2021, an emblematic year for our country, Greece may steadily move towards its promising future.
My fellow citizens,
The programme of transition from the uncertainty of today to the security of tomorrow will raise the amount of our interventions to 24 billion. It is based on three pillars: supporting jobs, cutting taxes and boosting entrepreneurship.
That is, it has the following characteristics: it strengthens the cohesion of society, by protecting jobs; it relieves households, by reducing their daily expenses; finally, it makes it easier for the business world to mobilise again.
In other words, this set of measures bears both a social and developmental stamp. However, it has been adapted to the needs of these times specifically.
The key to planning is the extraordinary and temporary SYN-ERGASIA (in Greek: co-partnership) programme for employment. As the programme name implies, it is the partnership between the State and all forces of production, so that jobs may not be lost during this difficult time.
I would like to remind you that in Greece the number of layoffs has been lower than that recorded in other European countries so far. Almost all employees and professionals in the country have been supported with the special-purpose compensation, while the State also covered their social security contributions in full.
This favourable set of measures extends not only throughout May, but also throughout June and July for the most hard-hit sectors.
From now on, however, work subsidy will be paired with actual employment financing.
I met hoteliers who asked me how they were supposed to employ all their staff, when the number of clients this year is going to be much lower than the number they usually host. The same concern is shared by restaurant professionals, who are to reopen their establishments this coming Monday, following three months of forced shut-down.
They are right. I have listened to them and here is my reply: businesses that have seen their turnover disappear into thin air and are now facing lower demand will be able to adjust employee working hours by the end of October.
If, however, the latter need to work less, they will continue to receive almost the same salary, and have their insurance contributions fully covered. How is this possible? Through the SYN-ERGASIA programme, that is going to cover most of the difference in pay.
And, of course, the security limit will remain at minimum wage level. Meanwhile, all unemployment benefits are extended, so that no one may be left unprotected.
In short, this mechanism, aimed to boost employment, on the one hand gets affected businesses room to breathe, by means of reducing labour costs and allowing flexibility in staff management. On the other hand, it shields employment, excluding all employee layoffs within this framework, while also protecting wages.
Therefore, when faced with the dilemma of “unemployment benefit versus labour aid”, I chose labour aid. It is the only responsible and realistic answer to the closures that are now threatening all economies.
I must stress yet again that this is a temporary intervention. This path is, after all, followed by countries such as Germany, France and Austria, with the aim of halting the advance of unemployment.
The SYN-ERGASIA programme is funded by the EU SURE programme. In the first phase, it will cost 1 billion euros. And of course we have yet to take into account in our plan the European funds that we are to receive from the European recovery fund.
The joint initiative of France and Germany, announced a few days ago, is an important step towards a Europe of solidarity.
My fellow citizens,
The second part of the plan concerns the tax relief of both citizens and businesses, especially those operating in tourism, transport, restaurant business and culture.
Thus, for the next five months, the VAT shall be reduced from 24% to 13% on all types of public transport tickets. I know the importance of cheaper travel by bus, ship or plane. And I want those travelling for their summer holidays to do so at the lowest possible cost.
Soon, support programmes for domestic tourism will also be announced for our vulnerable fellow citizens.
At the same time, we are reducing VAT on coffee products and non-alcoholic beverages. This also applies for tickets for summer open-air cinemas.
Culture and art workers are also included in the new programme. And in the coming weeks, they will be further supported with special welfare assistance.
These are changes that revitalise consumption. They stimulate purchasing power, and are also increasing the turnover of tourism and restaurant professionals.
For these professionals, a rent reduction by 40% is extended throughout the summer.
And another point, which, I think is particularly critical: advance tax payments are finally reduced. Indeed, it is unfair to be called upon to prepay taxes on the basis of any profits gained over a year, when these -especially over this year- are going to be much lower.
Therefore, advance tax payments will be handsomely reduced. And the exact percentage is to be announced soon, following a study.
I will note, however, that tax cuts on consumption will be temporary. As I explained, they are stepping stones to help us cross from recession to development as painlessly as possible.
The third pillar concerns enhancing business liquidity.
The second phase of the refundable advance is launched in May. This, in fact, also extends to companies that may not have met the criteria in the first stage.
Another 1 billion will be allocated for this programme. The Guarantee Fund for Businesses is also being activated, mobilising 7 billion in the course of 2020. Businesses will thus have the opportunity for quick and easy financing, with the State guaranteeing up to 80% of loans.
And finally, amortisation payments and loan instalments of companies of specific sectors are suspended until September. The details will be analysed shortly by the competent Ministers.
And there will be special reference to tourism. The tourist season starts on June 15, the date when seasonal hotels may open for business.
And from July 1, direct flights from abroad to our tourist destinations will start gradually.
Our visitors are to undergo sample tests and our general health protocols are to be observed. This is not to cast a shadow, however, over our bright sun or our country’s natural beauty.
Our weapon is the passport of security, reliability and health earned by our country. Greece’s great reputation. The shield of health, in all sites of hospitality. And of course, the passion of Greeks perpetually inspired by Zeus Xenios.
However, let us boldly face reality: in April and May, tourism sank to an all-time low. So, whatever we do achieve this year will be a gain.
And I will repeat this once again: our priority is to protect jobs. And to help industry professionals prepare for their big counter-attack in 2021. Because defending employment is a prerequisite for a return to growth. And massive job losses mean nothing more than a surge in inequality.
My fellow citizens,
As we have won the battle for health, we will also win the war for the economy.
However, we must show the same discipline, the same adaptability and the same solidarity, which have earned Greece global admiration.
My mission is to see the big picture and to distribute the burden of the crisis as fairly as possible. Indeed, we are in uncharted waters. But we have proven, as Greek people, that we are not afraid of hardship. Most of all, we are not afraid to change.
Many stereotypes have collapsed over these past months. Greeks, who, some have said, think as individuals, have become conscious parties to a collective effort. And the State, which has often been the cause of reasonable grievances, became a shield for us when we needed it. The State was not only functional. Rather, it was modernised and became more efficient.
Now trust has replaced suspicion. Now we believe in each other. And we all believe in the State.
I am certain that these legacies will not become sandcastles to be knocked down by the summer wave. But that depends on us all.
I know that for many of you, hope and fear coexist. Let us keep positive emotions as ammunition for the coming battle.
Personally, I feel stronger, having faced within a few months -and almost simultaneously- numerous challenges in the fronts of the economy, the flood of immigration and the threat of a global pandemic.
Everything has been difficult. But we did well. That’s why I’m optimistic about the day after. Because my single goal still remains unchanged: that Greece may reserve her right to change and become ever better!
Therefore, at the beginning of the path we have to cross, I ask you to help make this summer an epilogue to the crisis and a prelude to rebirth. With renewed pride and faith in our strengths. And, as always, armed with realism as our compass and a comprehensive plan as our chart.
Rest assured, together we will make this happen yet again!
My fellow citizens,