|Wednesday, 20 February 2019|
Athens Macedonian News Agency: News in English, 17-01-22
Athens News Agency: News in English Directory - Previous Article - Next Article
From: The Athens News Agency at <http://www.ana.gr/>
 Jury still out on whether lower taxes boost growth, Econ. minister says in article to ANAWhen it came to cutting tax rates, the real question was not 'if' but 'when' to cut them, Economy and Development Minister Dimitri Papadimitriou said in an article that he submitted to the Athens-Macedonian News Agency (ANA) on Sunday.
In the article, the minister analysed the current scientific position and the research into the links between lower taxes and growth, noting that this "does not help political dialogue" for the simple reason that there was no "common position" unanimously adopted by the academic community.
He also noted that existing research mainly refers to the period before 2010 and to advanced economies with stable tax systems and a greater tax "conscience". Their findings were largely overturned after 2010, he noted, based on the International Monetary Fund (IMF) Working Paper "Growth Forecast Errors and Fiscal Multipliers", which found that the multipliers are greater in times of recession and that the effectiveness of lowering tax rates is "doubtful".
"In times of extended recession and lack of financing in the economy, as is occurring in Greece, any benefit for businesses through taxation is channeled into increasing share capital or distributing an increased dividend and not to new investments," he wrote.
Papadimitriou also went on to cite other studies showing that the multiplier for public spending cuts is almost double that of tax revenue in Greece, meaning that if a cut in taxes boosts the economy by a given percentage, the public spending cuts that the lost revenue makes necessary will then reduce growth rates by double that percentage.
"Consequently, the political position that 'reducing taxation rates for businesses will result in growth' is misleading and does not help in dealing with the problems that really prevent growth," he said, outlining the factors that must be taken into account when making political decisions about the economy.
Papadimitriou said the main goals of policy makers must address the known problems of the economy, with action to ensure macroeconomic stability, a sustainable fiscal situation, key infrastructure, well-functioning institutions, low tax evasion, low corruption, a stable tax system, a business-friendly environment, greater competitiveness, implementation of essential economic reforms and completion of beneficial privatisations that will increase the economy's momentum.
"Only in this way will the healthy productive forces of the country be activated, while also showing international markets that Greece has left the distortions created by the previous political establishment behind it," the minister concluded.
 ND's Koumoutsakos: 'Yes' to Cyprus solution but not any proposed solutionAthens and Nicosia must be the guardians of the effort to find a solution to the Cyprus issue, in spite of Turkey's intransigency, main opposition New Democracy's shadow minister for the Cyprus problem George Koumoutsakos said in statements published on Sunday.
Speaking to the Greek newspaper "Vradyni," the MP noted that the Geneva meeting was a step toward a solution but that "many serious issues remain outstanding". The effort must continue, Koumoutsakos added, since the current regime of illegal occupation was unacceptable and had to end.
"Yes to a solution. No, however, to any proposed solution," he emphasised.
Asked to comment on press reports claiming disagreements and bad feeling between Greece's Foreign Minister Nikos Kotzias and Cyprus President Nicos Anastasiades, Koumoutsakos said he discounted press reports over the official announcements issued by Athens and Nicosia. He emphasised the absolute necessity to keep national unity and close coordination intact.
Koumoutsakos attributed Turkey's intransigence and its insistence that Turkish troops remain in Cyprus to geostrategic and geopolitical reasons, while expressing hope that Ankara can overcome such inflexibility and realise that a solution leading to a reunited European Cyprus will benefit the entire region and thus Turkey itself.
He criticised the Greek government, however, of being "trapped in ideology" and having a "proven, deeply deficient negotiating ability" that did not inspire any sense of confidence and trust.
 Greece will not legislate now for measures in 2019, FinMin Tsakalotos saysGreece is not prepared to pass legislation now for measures that will go into effect in 2019 and has made this abundantly clear, Finance Minister Euclid Tsakalotos said in an interview with the Sunday edition of the Athens-based daily "Ethnos".
"We are prepared to describe some classes of measures, which in the opinion of the lenders may possibly be needed after the end of the programme. But, as I have publicly and repeatedly said, I consider that these classes of measures are extremely unlikely to be needed," Tsakalotos stated.
The minister acknowledged the great importance of progress at the next Eurogroup, while noting that only the Greek opposition and Greek press appeared to blame Greece for this lack of progress.
According to Tsakalotos, none of the main actors stood to gain from inaction and no one wanted a repetition of 2015, which was why Greece was pressing for a rapid agreement and completion of the second review. He also noted that the important political developments in the coming year would not come from Greece but from the countries about to hold elections.
During the interview, Tsakalotos outlined reasons why one percentage point from the 3.5 pct primary surplus should be used to reduce social insurance contributions and taxes, chief among them a reduction in unemployment.
Regarding an "upgraded" role for the European Stability Mechanism (ESM), the finance minister said he agreed with the principle that Europeans should solve European problems but noted that the European Commission was also needed.
On quantitative easing, Tsakalotos admitted that the German side did not view this favourably in general but pointed out that the German finance minister "has no reason to not help Greece enter this programme." It was therefore reasonable to expect "our rapid inclusion in the programme after the completion of the second review," he said.
This, he added, must also include a description of the medium-term measures for the debt, which will be directly linked to the short-term measures whose implementation is already underway.
 Greece must not be presented with forever greater demands, Moscovici notesIt was natural for Greece's partners to expect that the country meet its commitments but only these and not constant additional demands, European Commissioner for Economic and Financial Affairs Pierre Moscovici indicated in an interview with the Greek daily "Real News" on Sunday.
He expressed confidence that the second review of the Greek programme will be completed, noting that only two or three "small issues" out of a total of 80 measures were still outstanding. Moscovici noted that after years of confrontations and delayed reforms, since July 2015 and the 3rd Greek programme was being implemented and the reforms were indisputably carried out, producing results. Noting that Europeans should recognise this, Moscovici said he was unable to understand how there could be hesitation.
According to the Commissioner, he was now more convinced than ever before that Greece has a place within the European Union, noting that the Greek people have consented to difficult and necessary reforms. The country was recovering slowly but finally doing better," he added.
Greece's efforts must be recognised and the EU must not surrender to those demanding more and more measures and belt-tightening, he said. According to the Commissioner, the commitments made in exchange for these efforts must now be honoured, while any further "psychodrama" would be "counter-productive." For this reason, he added, the second review must be completed quickly within the next few months and Europe has to examine additional debt relief measures.
 Vernardakis to ANA: 'The struggle for a fairer society is a high-endurance marathon'Only a handful of issues were still outstanding for completing the second review and these were not sufficient to put it on hold, Minister of State Christoforos Vernardakis said in an interview with the Athens-Macedonian News Agency (ANA) released on Sunday.
In a broad-ranging interview on all current affairs, Vernardakis assessed the achievements of the SYRIZA-ANEL coalition government after two years in power, noting that several things had been done but that it could now do "more and better". "The struggle for a better and fairer society is a high-endurance marathon," he added, advising those anxious for snap elections to "be patient".
Replying to questions about the second review and the "Guarantees Mechanism" or 'automatic spending cutter' demanded by the institutions, Vernardakis said the government's position was that this mechanism would not have to be activated.
"The only thing that could be discussed, on our side, is a general description of the areas where it might potentially be activated," he said. He also noted that legislation providing for such a mechanism was first passed in 2014 but that the current leader of main opposition New Democracy was "pretending not to know this."
He predicted that the final report of a Parliamentary investigating committee into the loans to political parties and the media, due to be unveiled on Monday, would be a "great lesson in the workings of the corrupt political systembuilt in the country after the 1990s" and a "narrative on the crisis in democracy."
Vernardakis sharply rebuffed the criticism aimed at the government over its handling of the bankrupt Lambrakis (DOL) media group, noting that neither SYRIZA "will become DOL nor DOL become SYRIZA."
He also promised a "merciless" response to fascism, when asked about incidents at a school in Perama, and noted that a solution to the Cyprus issue "does not appear to be very close," in spite of the progress that has been made.
Athens News Agency: News in English Directory - Previous Article - Next Article