Tax Cuts In Greece: The Public’s Expectations On A Background Of Creditors’ Skepticism

Tax Cuts In Greece: The Public's Expectations On A Background Of Creditors' Skepticism




The head of the Greek government Antonis Samaras promises to reduce taxes. Population hopes to take this step, but it is ready thereto, the country’s economy?

Dimitris Stamatopulos consider themselves optimists camp. After the crisis began in 2009 selling wine entrepreneur faced with a dramatic collapse in trade.

But now his company in Athens, finally began to dawn “light at the end of the tunnel.” His optimism, says Stamatopulos, including support of the fact that the winery, taught by the crisis, reduce production costs and selling prices. Now, the company is betting on small wineries, which are capable of producing good wine at reasonable prices. “Recent years have been difficult for us, but the situation is improving gradually” – happy businessman.

But because of the high taxes the case of family businesses recover slowly: VAT on wine is 23 percent. In addition, production costs continue to rise because of the property tax and the introduction in 2011, the excise tax on fuel oil. “People can not pay more taxes” – outraged Stamatopulos. According to him, Greece has been listening to the promises of politicians to reduce the payments, only the action behind the words almost never came.

Greece’s economy: the worst is over?

Makis Statopulos also worries about tax burden. Sports teacher by training, he holds at the Athens region network of fitness clubs whose cases in recent years are not the best way. As a result, the entrepreneur underpaid state social contributions required.
“But the state has to me, as I took off too much tax” – complains entrepreneur. According to him, the authorities require him to immediate repayment of the debt, but its own debts, apparently paid, when they consider it necessary. In the meantime, businessman ponders to open a fitness studio in Turkey to increase its revenues. In fact that Greece is about to begin the growth of the economy, he no longer believes.

But the head of the Greek government Antonis Samaras sure that the turning point for the Greek economy is already here. The worst is over, the public debt of the country in absolute numbers began to decline, the prime minister said in early September at the opening of the largest in Greece Trade Fair in Thessaloniki. Voters are tired of the crisis as Samaras promised tax cuts, including the excise tax on fuel oil. This he continued a long tradition of Greek politicians, who use autumn exhibition in Thessaloniki as the perfect place where they can promise benefits to the people immediately after the summer recess.

On the question of whether the tax cuts permissible step that Greece can afford a financial point of view, opinions differ. Jannis Angelis, editor in chief of the Greek economic newspaper Capital, believes that the country has no alternative. “People are already empty pockets. Reduce any taxes or not, but their yield will decrease because of more taxpayers get nothing” – said the economic expert with irony.

Former Industry Minister Andreas Andrianopulos argues its opinion in more detail: tax cuts are solid, and it is necessary, that’s just it must be accompanied by a significant reduction in the bloated state apparatus. Only to cut spending on public officials, the country will be able to afford a reduction of income tax, and this problem is not only economic but also political plan, warns an expert. According to him, in Greece no one dares to take on such a reform. That is why the trio of international lenders – the European Union, the European Central Bank and the International Monetary Fund – skeptical reduce taxes in Greece without appropriate compensatory measures.

Possible tax cuts the Greek government has discussed with creditors in early September in Paris. This was only a preliminary round of discussions, the main supposedly held in Athens at the end of September. In addition, according to the Athenian channel MEGA, the Greek debt issue will be discussed at a special summit, scheduled in November in the United States.

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