Tax reduction proposal by Mr. Samaras

Chairman of the New Democracy party Antonis Samaras has shot down all talks about a consensus and declares that he is ready for elections. During his proposal presentation on the economy at Zappeion, Mr. Samaras proposed “a restart of the economy, a change in the development model and a renegotiation of the terms of the memorandum",  explaining that the restart would cause a creative shock.

“Consenting to the wrong policy is a crime”, he said, and characteristically spoke of early elections, stating that “you're welcome if you do, you're welcome if you don’t, but in my village, it’s the first time that I see a lamb edging for Easter”…

Mr. Samaras began his speech with references to the death of the 44 year old and unleashed an attack on the government, but declined to refer to yesterday’s incidents with protester injuries. “Zero tolerance for horrific events such as the assassination of the 44 year old the day before yesterday”, he stated, adding that “the protection of life and property comes before the economy”.

Seven steps to restart

1-    Reduction in tax rates: We suggest a profit rate of 15% for all companies and taxation on dividends from 25% to 15%. The maximum income tax rate which was originally 45% will fall to 40%, and within three years should not exceed 30%. VAT will go from 23% to 19% in the high categories and from 13% to 9% in the medium category, while tourism businesses will only be taxed at 4.5%. On the issue of fuel, he stated that the additional excise tax that PASOK instituted will be abolished within 2 years.

He put forward a reduction of employer contributions by 25%, following Ireland’s example, but with draconian penalties for illegal work and the gradual elimination of taxes for others.

2-    Settlement of past outstanding issues. Removal of taxation checks for residences, but without a further increase in objective values. The checks would still apply to any ministers that have served since 1974.

3-    An overall tax system reform, through the introduction of a simple and stable system of codified rules and harsh penalties for tax evaders.

4-    The regularization of all illegally built houses and buildings, aerial photography throughout Greece and a ban on illegal building with severe repercussions

5-    The state will pay off its debts to all individuals and liabilities of any kind. The government cannot be in the forefront of the “I refuse to pay” movement.

6-    Securing a commitment of banks that would give the economy 20-30% of the securities they get. They have received 63 billion and only yesterday another 30 billion was added. “I asked Mr. Trichet to extend the measures in order to enhance bank liquidity until 2012”, he said.

7-    Zero or minimum financial cost steps, like a first home subsidy rate of two percentage points in order to reactivate the construction industry, which is the fuel of the economy. Furthermore, a plan to improve the energy potential of housing, use of EU funds and a public investment program. These breaths of fresh air can directly bring 8 billion to the Treasury within the first two years.

Special mention was made to rectifying the injustice in the pensions of those who only received a salary of 700 euro, in order to aid large families.

The total of the restart measures will produce a profit that reduces the deficit by 2%, adding measures to address fiscal wastefulness. Also suggested were: cost prediction of hospitals with full computerization and prescription conditions for all levels; a freeze on recruitment in the public sector for three years, after one intake for five retirements; a cut in benefits for highly-paid individuals, especially in public utilities.

Samaras attacked the government, stating that PASOK has launched a new cycle of wastefulness and that it once more supports the party’s supremacy in the country. He stated that he does not propose horizontal cuts and added that the implementation of the restart programme will produce a reduction in the deficit of 1% of the GDP within three years.

He spoke of institutional measures that accompany the fiscal relaunch and put forth a reduction in bureaucracy, while he also made specific reference to the proclamation of the EEZ that PASOK fears and which would exploit the country’s mineral wealth.

Public property and privatization

Mr. Samaras mentioned the advantageous development of public sector real estate worth 50 billion. “We propose this because we knew that the debt would not be controlled, but the government mocked us”. “Today, the Troika has set this as a loan condition”. He also added that this plan requires time, while he made special mention of the fiasco of Astakos island.

On the issue of real estate, he mentioned that individual properties can be sold, while he proposed that the church real estate can also be advantageously used. “Taking advantage of public sector property means convincing some to invest. If there is no fiscal restart, there can only be selling out. Forms of exploitation are numerous .

He supported privatization but noted all along that all public utilities cannot reach 6 billion if the government keeps selling stocks and dropping prices. He characterized the formulated plan to sell 17% of PPCs as one that only points to accountancy panic. “We will privatize PPC in a modern way, releasing energy at first. Distribution and transport networks have to remain in government hands. We will seek out  strategic investors for the sectors we will seek to privatize.

Mr. Samaras mentioned that a strategic investor will be sought for other public companies. About OPAP, he mentioned that it cannot be sold for its two-or-three-year profit price, while he also accused the syndicates of public utilities with the phrase “no one owns energy or any other public  infrastructure”.

Political Messages
We have to change the Memorandum terms, Mr. Samaras said, adding that “some are counting on Greece’s bankruptcy. The country cannot stand more instability in these ambiguous times”. He argued for a change of the memorandum terms, supporting the successes of Portugal and Ireland, who were able to achieve better conditions.

“I will renegotiate all the terms of the restart”, Mr. Samaras stated, and added that he will listen to any idea that makes debt easier to manage. He returned to the Eurobond proposal and to the ability to repurchase debt in the secondary bond market. He also mentioned the current “talk of the town”, which is the extension on loan repayment. Mr. Samaras pointed out that it would not be harmless and any talks of debt restructure will require an economic restart”.

He attacked the Prime Minister, saying that “Papandreou does not know where to stand and where to go. He has no plan. The new Memorandum is being talked about because the first one failed”.

He proceeded to send out several political messages, stating that “I took the risk and stood up against the memorandum when many people said that this is the only way. I did not hold back on our views even abroad. Our criticism was vindicated. On this day, I am all for a restart. We did not utter the words "the money is there". They speak of concensus, but to what should I consent? To the same thing that I disagree with, which is destroying my country? It would be a crime. How did they decide that I am obligated to accept a mistake? Don’t they need to correct said mistake? Maybe the lack of consensus doesn’t let them govern”. He proceeded to clarify that “It is the right of the government to govern and make mistakes, but it is also a non-negotiable right of the opposition to disagree. Unity in correct decisions is a must. Unity in incorrect ones, though, can never be allowed”.

Finally, he reported on the election scenarios: “I hear of petty extortions in relation early elections. They are welcome if they do, but I am not sure they really want to”.