THE GOVERNMENT PERSPECTIVE
GREECE IN A NEW ERA – LOOKING AHEAD WITH CONFIDENCE
H.E. Kyriakos Mitsotakis, Prime Minister, Hellenic Republic, delivered the Government’s message to US Investors (via webcast) at the 21st Capital Link Invest in Greece Forum: “Greece is Back”.
“Dear friends, Ladies and gentlemen,
It is a real honor to address you today on the occasion of the 21st Annual Capital Link Invest in Greece Forum: “Greece is Back”. A Forum that has established itself as a major platform for informing the US and the global business community on the economic and financial developments taking place in Greece.
Today I am going to give you a flavor as to why I believe Greece is indeed back. The new government has been in office for just five months. In this brief period of time, it has already concluded a series of deep structural changes and has laid the foundations for many more. Our main economic target is to significantly increase Greece’s growth rate and we want to do that by attracting hundreds of billions of investment.
At the July elections, Greece came firmly out of political fragmentation, with my party Nea Demokratia gaining 40% of the national vote and a clear majority in parliament. A single-party government is now anything but common in Europe, and creates the backdrop for political stability, for a clear four-year horizon of predictability, where investors and citizens can plan their lives without political uncertainty.
Ladies and gentlemen: This government is the first since the crisis started to take full ownership of the reform agenda. We have been elected on a platform that goes way beyond the policy prescriptions of our creditors. We believe Greece deserves to be at the forefront of global policy making.
One of the first things that needed reform in Greece was its tax code. We have already cut the corporate tax rate from 28 to 24%. And we will cut it further to 20%. We have cut the dividend tax rate from 10 to 5%. We are also reducing social insurance contributions by a total of 5pp by 2023, of which 1pp next year. We are drastically reducing taxation on stock options; introducing a flat rate of 15% for regular businesses and only 5% for start-ups. We believe in aligning owner and worker incentives and want to stimulate a culture of entrepreneurial risk taking. We are abolishing a tax on Greece’s REITs that significantly undermined their viability. We are repealing a levy that spurred Greek mutual funds to depart for Luxemburg. We are also introducing a non-dom beneficial tax framework to attract wealthy individuals to come and reside in Greece.
But this government is also focused on broadening the tax base. A series of initiatives have been undertaken with the aim of increasing the share of digital transactions. Taxpayers will have to spend 30% of their annual income through digital means, thus hitting tax evasion.
Our reform agenda goes well beyond changing tax policy. With the new growth and development law, a series of radical changes have been put in place, making it easier for investors to open up a business and operate in Greece.
In energy, we have a very ambitious agenda with two umbrella objectives: first, to reduce dependency on lignite, closing all our lignite-producing plants by 2028. Our energy dependency will shift over the long run to renewable energy sources, and we invite investors to come and invest in Greece. Our second energy umbrella objective is to introduce competition, and we are working hard to reform and restructure PPC, our state electricity company, with the ultimate aim of partly privatising the distribution network.
We are a government that is bent on unblocking investments. The Hellenikon project –the old Athens airport– is going to break ground in 2020. Our 30% stake in the Athens International Airport has received a record ten non-binding bids. We also want to extend the concession for the Egnatia motorway in the north of Greece as well as partially or fully privatise another ten regional ports.
Everybody knows that transparency, accountability and ensuring a level playing field is a critical factor for attracting serious and long-lasting investments. This is why we have appointed new, truly independent leadership at Competition authority and at the Capital Markets Commission. Indeed, in early 2020 we are going to be voting through a more robust institutional framework with regard to capital markets to strengthen transparency and credibility.
I will conclude with our banks. We are implementing our so-called Hercules plan. Based on the Asset Protection Scheme that was first applied to Italy, the plan will slash NPEs by nearly a half. Our banks will become healthier and stronger.
Ladies and gentlemen,
My country has gone through a painful ten-year adjustment. We are coming out of this regenerated, confident and optimistic of the future. There is a lot of catchup to do and no time to waste. We invite all of you to join us in profiting from this journey. This is the time to invest in Greece.”
Photo Credit: ND Press Office/Dimitris Papamitsos via Eurokinissi