14:37 | 22/07/2019 Global Economy
Greece will submit a 2020 budget later this year that will fully respect the fiscal targets agreed with its lenders, newly elected Prime Minister Kyriakos Mitsotakis said on Saturday.
|Greece’s Prime Minister Kyriakos Mitsotakis|
Outlining his main policies after a landslide victory in a July 7 election, Mitsotakis told Greek lawmakers that the budget would not put fiscal targets for 2019 and 2020 at risk.
Greece emerged from economic adjustment programs overseen by its lenders last August but still needs to meet fiscal targets, including a primary budget surplus — which excludes interest payments on its debt — of 3.5 percent of annual economic output up to 2022, which many consider unrealistic.
“In the draft budget for 2020, the given fiscal balance is not disrupted and the primary surplus targets for the years 2019 and 2020, agreed by the previous government, are not disputed,” Mitsotakis said.
Mitsotakis, who takes over from former leftist Prime Minister Alexis Tsipras, was elected on a pledge to cut taxes and speed up investments to spur growth in a country that lost a quarter of its output during the Greek debt crisis.
He said planned tax cuts and bold reforms of the economy and public administration would lead to higher growth and help Greece convince its lenders to lower fiscal targets after 2020.
“In 2020 ... we will have the ability to seek the lowering of primary surpluses to more realistic levels,” Mitsotakis said.
Corporate tax will be cut to 24 percent on 2019 profit from 28 percent currently and taxation on dividends will be halved to 5 percent, he said, adding a highly unpopular property tax that was introduced in 2012 at the height of the crisis will be cut by an average 22 percent this year.