Carrots for V-shaped rebound
“Incentives” is the key word in the government’s plans to revive the economy, with the aim of bolstering investment and employment.
This mainly concerns tax incentives, such as the reduction of the tax deposit and the acceleration of investment amortizations, as well as social security incentives like easing contributions, as the government had originally planned, according to multiple Finance Ministry sources.
The tax and social security incentives for tourism and exporting enterprises are mentioned in the government’s Reforms Program submitted to the European Commission this week in the context of the European Semester.
The aim is to contain this year’s recession to 4.7 percent, as the ministry’s baseline scenario in the program provides for, with a 5.1 percent recovery projected for next year. To contain the economic contraction of 2020 there are measures totaling 24 billion euros, as Minister Christos Staikouras said on Thursday.
The Reforms Program stresses that the economic revival will require the strengthening of demand with positive effects on the supply side. It cites a number of examples:
– Tax and social security incentives for tourism enterprises that make this summer any investments and repairs scheduled up to the winter of 2021, as this year they will only operate for a limited period or may not open at all.
– Tax and social security incentives for exporters that increase their output and enterprises that have not exported to date so as to invest in their development.
– The immediate activation or acceleration of all mature and unfolding public investment projects; such is the case of already decided infrastructure upgrades at tourism destinations.
– The immediate advance of mature private investment plans, such as the development at Elliniko.
For the V-shaped recovery of 5.1 percent to be realized next year, the ministry says the health crisis should “gradually ease in the first half of 2020 and the biggest financial impact be visible in the third quarter of the year.”
