The draft budget for 2022 highlights the government's economic priorities, aiming at achieving high and sustainable growth, creating new jobs and strengthening social cohesion, said Finance Minister Christos Staikouras at the beginning of the discussion. to the Finance Committee of the Parliament.
He also stressed: "It proves that the government has a vision and a plan, and can successfully cope with unforeseen, multilevel and largely asymmetric crises."
The Minister underlined that the government with the draft budget "without triumphs and with full awareness of the new challenges that emerge, continues on the path we have already set, by implementing a development, reform, responsible, credible and fair economic policy, aimed at a Greece that is dynamic, productive, extroverted, socially just, green, without exclusions and inequalities "and these" we owe to the Greek citizens, the new generation, in Greece ", he said.
Mr. Chr. Staikouras He said that the draft budget is distinguished by consistency and credibility, conservative estimates, realistic forecasts, ambitious goals for a dynamic economy. It captures the good performance of the Greek economy, highlights the development prospects of the country, confirms that the government has an effective plan, with coherent economic policy priorities, that meets the new challenges, incorporating the environmental dimension. Effectiveness with social justice.
The Minister of Finance stated that with this draft budget we are implementing a wide range of measures to support and strengthen households and businesses, amounting to 42,7 billion euros, keeping society and the economy afloat.
Referring to the goals and results of government policy over the past two years, he said that "investment has been multiplied and exports have been boosted." Industrial production to record a steady upward trend. The economic climate is moving to pre-pandemic levels. Processing to be enhanced. Construction activity to increase. Losses in the field of tourism to be reduced. Credit expansion to reheat. Deposits to increase.
Electronic transactions to be strengthened. Non-performing loans to be reduced. The cost of borrowing in the money markets should be consistently negative. Borrowing costs in the capital markets are at a historically low level. The competitiveness of the economy should be improved and the country should be upgraded ".
The economy is showing signs of recovery
In particular, he mentioned, among other things, that the disposable income of households, mainly of the middle class, has increased.
According to the data of the European Central Bank, which converge with those of ELSTAT, disposable income increased by 5,3% in the first quarter of 1, when in the euro area the corresponding percentage was 2021%.
Indicatively, the average personal income increased by 7% compared to 2019, and amounted to 10.041 euros. In addition, household deposits alone have increased by 19 billion euros since June 2019.
Secondly, the real income of the employees has increased. This is the result of the reduction of insurance contributions, the suspension of the solidarity contribution, the reduction of income tax, the reduction of ENFIA, while an increase in the minimum wage is imminent. The total annual benefit for those who are paid the minimum wage ranges from 305 to 533 euros.
Third, businesses start economic activity, as, according to the Preliminary Draft, business start-ups, for all sectors of the economy within the second quarter, showed a large increase of 2% compared to the corresponding quarter of 70 .
Fourth, employment is rising and unemployment is falling. Already, employment grew by 2,8% in the second quarter of the year and unemployment fell to 2%, from 14,2% in July 17,3. And now, the number of unemployed is the lowest since October 2019, while the number of employees is the highest since August 2010.
Fifth, the percentage of the population at risk of poverty or social exclusion is declining, as according to ELSTAT data, the percentage of the population at risk of poverty or social exclusion fell to 28,9% in 2020, compared to 30% in 2019 and 32 % in 2018.
Sixth, the estimate for this year's growth is 6,1%, a forecast that is completely realistic, and may even prove to be conservative again, based on the precursors of the economy.
With these as a springboard, said the Minister of Finance, we continue the implementation of the six medium-long-term goals, which are:
1st The achievement of high rates of economic growth, from this year, as, as reflected in the Preliminary Plan, the growth of the economy in the coming years will be strong. In particular, the cumulative growth of the years 2021-2022 increases to 10,8%, signaling that in the year 2022, not only is it expected to fully restore the pre-pandemic level of domestic product, but it will increase further by about 2%.
2nd. The improvement in the composition of GDP, with a significant increase in investment and exports, from this year, as reflected in the Preliminary Draft, the growth rate of real investment is estimated at around 11% for 2021 and 23% for 2022.
3rd The exit of the country from the regime of Enhanced Supervision, within 2022.
4ον. Achieving a single-digit percentage of non-performing loans in the banks' portfolios, within 2022, as from this year, systemic banking institutions are estimated to achieve a single-digit percentage.
5ον. Achieving realistic primary surpluses by 2023. In the Preliminary Plan, the general government primary deficit will shrink significantly, from 7,4% in 2021 to 1,1% in 2022, returning the country to primary surpluses in 2023, exclusively through of the dynamic recovery and strong growth of the Greek economy.
6th The acquisition of a better level of investment, in 2023, as our economy - and in the midst of the health crisis - is already upgrading.
Therefore, said Mr. Staikouras, this achievement of these six goals is absolutely realistic. And this, because we have from
fascism and efficiency, political will and plan. A coherent plan, which we are implementing on the basis of defined priorities, on which the current draft budget has been built.
Specifically:
1st Priority. The return of the real economy to normal operating rates, with targeted support to households and businesses. In this context, in the second half of 2021, in parallel with the complete restart of the economy, we continue to strengthen society, with measures such as:
The "BRIDGE" Programs for the subsidization of loans of individuals and legal entities. The subsidy of part of the fixed expenses of companies. The implementation of targeted programs to support sectors of the economy, through the NSRF, while in the existing measures, new or existing interventions are added, such as the extension of the SYN-ERGASIA program, until the end of 2021.
Grant programs for 100.000 new jobs are being extended to another 50.000. The rate of return of all Refundable Advances is reduced, depending on the fall of the gross income of the company. The first stamp is provided, for young people from 18 to 29 years old, without previous service, who will be hired in 2022. A double installment of the guaranteed minimum income is granted in December.
2nd Priority. The support of society from the effects of the international energy crisis, which has a greater intensity and extent than the initial ones - globally - with a significant and increasing burden on households, especially the most vulnerable. That is why the government has taken concrete European initiatives and is implementing coherent national policies, proving - once again in practice - that it has fast reflexes and efficiency.
In particular, he said that at European level: We have submitted a proposal, together with the Minister of Environment and Energy, for the establishment of a mechanism to support European consumers from the effects of the energy crisis. I co-signed a statement with the finance ministers of France, Spain, the Czech Republic and Romania proposing concrete action.
While at the national level: We implement policies -mainly tax cuts- with the aim of further enhancing the disposable income of the citizen, so that it overcomes temporary turmoil and crises. And we have targeted measures to deal with the energy crisis, such as the reduction of electricity and the increase of the heating allowance, amounting to 500 million euros, to protect family budgets and maintain social cohesion, while emphasizing that "we will be close to society , for as long as needed"!
3rd Priority. The continuation of the implementation of a prudent fiscal policy, in the direction of further reduction of taxes and insurance contributions. Recalling that we have already reduced ENFIA -on average- by 22%.
Reduction of the import tax rate on natural persons, from 22% to 9%.
Reduction of the withholding tax rate for dividends, from 10% to 5%.
Reduction of the tax advance for natural persons engaged in business activity, from 100% to 55%, and for legal entities, from 100% to 80%. Reduction of insurance contributions by 1 + 3 points.
While, as reflected in the Preliminary Plan, we are proceeding with new reductions or expansion of the existing ones, as the exemption from the special solidarity contribution of incomes from the private sector continues, also for 2022. The reduction by 2022 percentage points of insurance contributions is extended for 3.
The corporate income tax is further reduced - on a permanent basis - from 24% to 22%. The application of the reduced VAT rates in transport, coffee and non-alcoholic beverages, cinemas and the tourist package is extended until June 2022. The VAT rate is reduced in gyms and dance schools, from 24% to 13%, until June 2022.
The suspension of the payment of the pay-TV fee is extended, until June 2022. The tax of parental benefits-donations -for movable and immovable property- for first degree relatives, which concerns values up to 800.000 euros, is abolished. The mobile subscriber fee is reduced to 10%, and is abolished for young people up to 29 years old, from January 1, 2022.
The 4th priority is the continuation of the implementation of a smart and insightful publishing strategy, in order to maintain strong cash reserves, which currently exceed 39,6 billion euros.
With specific policy initiatives, such as: regular access to money and capital markets, preparation for early repayment of part of the bilateral loans that Greece entered into with the Eurozone countries in 2010, the further repayment of IMF loans, the creation of an issuance framework with orientation towards "green" and sustainable development. Initiatives that contribute to the further strengthening of the prestige and credibility of the Greek State, the expansion of the investment base of Greek bonds, the improvement of borrowing costs and the strengthening of sustainable economic growth.
The Government's 5th priority is to strengthen liquidity in the real economy, with policies such as the implementation of the "Hercules" program, the implementation of the debt settlement framework for individuals and legal entities and the utilization of the Recovery and Sustainability Fund loan portfolio of 12,7 , XNUMX billion euros.
6th Priority. The implementation of structural changes and the utilization of public property. With specific policies, which are: tax incentives to further increase e-commerce. The granting of an increased discount for expenses related to green economy, energy and digitization. The tax incentives for mergers and acquisitions, which were recently put up for public consultation. The addition of responsibilities to the HRDH, in order to accelerate and improve the implementation of projects of Strategic Significance.
The continuation of the program of privatization and utilization of public property. Where after the three recent, extremely successful, transactions, in Egnatia Odos, DEPA Infrastructure and HEDNO, are launched: the development of the property in Gournes, with the submission of offers, within the week. Utilization of the regional ports of Alexandroupolis, Kavala, Igoumenitsa and Heraklion. The completion of the tender for the concession of the marina of Kalamaria and the start of the procedures for the utilization of the marina of Pylos and Lefkimmi of Corfu. The preparation of the tender for the re-concession of Attiki Odos.
7th Priority. The rational utilization of the available European funds, with the "peak" the Recovery and Resilience Fund and the new NSRF, totaling about 80 billion euros by 2027. That is why the Preliminary Plan envisages the implementation of the National Recovery and Resilience Plan will give the Greek economy an additional 2,9 percentage points of GDP, without leverage, in 2022.
In fact, the minister said, more than 88% of the total distribution of grants and loans from the Fund will be directed to investments, 42% of which to public investments with a high multiplier effect, thus contributing to a substantial reduction of the long-term investment gap.
Finally, the Minister of Finance highlighted the 8th priority, the active participation of the country, as has been done for the last 2 years, in the structure of a new European economic architecture. "The new European Economic Architecture must ensure the long-term sustainability of public finances, while offering the greatest possible flexibility in dealing with crises, while protecting and encouraging public investment, especially in priority areas such as green and digital transitions."
That is why among the other initiatives that are being taken are: the completion of the banking union and the union of the capital markets. The reform of the Stability and Growth Pact. And the formation of the new international framework for the taxation of multinational companies, through the OECD.
photo jcomp, Image license by freepik.com
