Dear friends,
Ladies and gentlemen,
It is a great pleasure to be addressing you today on the occasion of the 15th Annual Greek Roadshow. Of course this is not the usual setup, as the pandemic has changed our world and the way we do business. But against this extraordinary situation, let me give you some thoughts on how we are dialing with this problem in Greece, and the opportunities we see ahead of us.
It is a great pleasure to be addressing you today on the occasion of the 15th Annual Greek Roadshow. Of course this is not the usual setup, as the pandemic has changed our world and the way we do business. But against this extraordinary situation, let me give you some thoughts on how we are dialing with this problem in Greece, and the opportunities we see ahead of us.
Our primary objective as a government has been to protect the health of its citizens. In that respect, I would like to report to you that Greece currently ranks country number 111 in deaths per capita. Like other countries in Europe, our country saw a second wave of Covid infections in August and early September. In response, the government took additional measures, tightening restrictions where needed. So far our experience has been better than elsewhere. I am cautiously optimistic as we look into the period toward the spring, when we expect a vaccine rollout to be providing us with more certainty and predictability.
On the economic side, we are providing both businesses and workers with the fiscal support they need to get through this difficult period. On Saturday, in Thessaloniki, at the Prime Minister’s annual address to the nation, I made a subtle yet important pivot in our economic policies. We, of course, continue to extend business loans where necessary as well as protecting jobs through short-term work schemes and the like. However we are now also moving beyond protection and toward growth.
I announced four important initiatives: first, a 7.5% reduction in social security contributions payable by both employers and employees. Second, the suspension of the so-called solidarity income tax surcharge. Both measures are for 2021, but we are confident we will find the necessary fiscal space, through structural reforms, to extend them beyond that. These tax cuts are applicable to the private sector, as this is the one that has primarily borne the brunt of the Covid recession.
Remember, we came to power promising a significant reduction in the labour tax wedge, and this is what we are doing today. Those measures, alongside the structural changes we have already put in place, make foreign direct investment in Greece and the creation of jobs even more attractive.
In addition, we are extending accelerated depreciation allowance to include not only spending in research and development, but also investments channeled towards green and digital initiatives.
Last, but not least, we are building an employment bridge into the spring. The government will now fully cover social security contributions for a six-month period for new jobs created by companies that are growing.
Meanwhile, we are still aggressively pushing forward with our reform agenda. Our new insolvency code was published, introducing for the first time a unified framework for restructuring and bankruptcy of individual and corporate debt. This is no less than a revolution for Greece, simplifying and speeding up procedures, protecting the rights of creditors, while clearing out the so-called ‘zombie’ companies and helping cement the country’s entrepreneurial spirit.
Autumn should see the rollout of the 5G auction and the sovereign fund we are setting up to support 5G initiatives. And we continue with our relentless effort towards digitizing the state and legislating our Digital Governance Code.
In energy, we will soon be launching the sale of a 49% stake in DEDDIE, our electricity distribution network.
In the financial sector, “Hercules” is proceeding as planned. We expect the participation of all four banks by the end of 2020 and the scheme is on track to reduce the stock of bad loans by half.
Later this year we will publish our proposal to transition supplementary pensions from a defined benefit toward a defined contribution system. Over time, this will further support the development of Greece’s capital markets.
This summer we successfully concluded negotiations for the European Union’s 750bn Recovery fund. Greece is expected to be on the receiving end of approximately 32bn, that’s over 17% of Greece’s GDP, over a period of six years. Teams are currently working hard on our national growth plan. Our priorities are: green, digital, private investments and economic transformation, employment, skills and infrastructure. The plan includes both reforms and investments, and is based on economic principles as outlined in a report we commissioned from a team led by Christopher Pissarides, the Nobel Laureate.
Ladies and gentlemen,
Heading into the Covid crisis, Greece was on a strong economic trajectory. When the crisis hit analysts around the world were quick to delegate Greece back to the bottom of their global economic forecasts. Data from the first half of the year already suggest such forecasts were both hasty and wrong.
Obviously a global pandemic was not in our plans when we came to power, just over a year ago. But credibility is earned in difficult, not easy, times. I strongly believe global investment and talent will ultimately flow to those countries that tackle the pandemic better. And I am confident that Greece will be one of them.
In March Greece will celebrate 200 years since its war of independence. At that point I want to be able to look back with pride at how my country fared through this symmetric global shock. Please join me in investing in Greece’s future.
Enjoy the rest of the Roadshow.
