PM emphasizes reforms in TIF keynote speech

“My speech will not contain pompous promises of handouts,” Prime Minister Kyriakos Mitsotakis said in his keynote speech at the Thessaloniki International Fair Saturday.

Instead, the Prime Minister focused on the recent disasters – the fires that devastated the regional unit of Evros, in the northeast, next to the border with Turkey and the heavy flooding that hit the region of Thessaly, in central Greece.

And while he promised that “whatever we lost, as state and as citizens, we’ll build back better,” Mitsotakis also noted that the disaster response was plagued by was confusion about who is responsible for what and a tendency by public agencies to shift blame to others for delays or inadequacy.

Mitsotakis noted that the magnitude of both disasters is related to the climate crisis, but added that the great mass of water dropped on Thessaly is a warning of future events to come; it is not an excuse.

“It is difficult to explain to someone who has lost their home that 8 billion tons of water fell in Thessaly.”

Mitsotakis, who began his keynote speech saying he wished he could focus on the good economic use, such as the attainment of investment grade for Greece’s debt, the relatively high growth and the drop in the unemployment rate, said that the economy is strong enough to withstand the cost of reconstruction. He did not put a tag on the final cost but noted that, on Friday, the first €25 million in aid was disbursed.

The Prime Minister announced that a special reserve account for natural disasters will double in size, to €600 million, from 2024. The extra revenue will come from higher occupancy tax (from €1-6) in luxury hotels.

In an implicit rebuke to the performance of local and regional authorities, Mitsotakis announced the creation of a Thessaly Water Management Agency to be jointly administered by the Infrastructure and Environment ministries. The performance of all local and regional authorities across the country will be monitored with the help of a performance index, he said. The Armed Forces will also take a more active and clearly defined role in dealing with natural disasters, he added.

Mitsotakis also hinted that insurance of all properties from natural disasters will become mandatory, although he only talked about a needed “debate” on the issue.

In the second half of his speech, Mitsotakis referred to the implementation of his pre-election pledges, which amounted to a total of €4.4 billion, he said. By the end of the year, 50% of them will have been enacted.

The PM said that he will not sacrifice fiscal stability to give any one-off handouts. The goal of a primary budget surplus – that is, excluding servivc

The measures that will take effect from next year include:

– Automatic wage hikes based on seniority, and related bonuses, frozen since 2012, will be restored on January 1, 2024. Their re-introduction will be decoupled from the drop in the unemployment rate.

– A wage hike of 10.5% for public sector employees from January 1.

– The tax-free income segment will be raised by €1,000 for families with children. This will apply to some 1,340,000 taxpayers.

– 200,000 former recipients of the special Solidarity Bonus will pay nothing for medicines.

– There will be measures designed to keep prices of some essential goods steady, or, in some cases, lower.

– A new minimum wage hike from April.

– An 8% hike in the Minimum Guaranteed Income.

– A special bonus for pensioners who will see no rise because of prior legislation.

– New pension hikes for all other pensioners.

– Continued subsidy of electricity bills for lower incomes.

– Pensioners who continue to work will see their salaries taxed at 10% from 30%.

– Strengthening of the banking sector, with a plan to create, through mergers, a 5th big bank next to the existing four (Alpha, Eurobank, National and Piraeus).

– Loans from non-banks.

– Abolition of tax on Treasury bonds to encourage the public to buy them as a form of savings.

– Halving of the tax on stock market transactions.

– Short-term rentals of three or more properties will be subject to VAT and occupancy tax same as hotels.

– A “Youth Pass” one-off payment of €150 to 200,000 18- and 19-year-olds.

– Doubling of the budget for subsidizing mortgages for people aged 25-39, with the aim of creating 10,000 new homeowners (4,700 low-rate loans have already been approved).

On tax evasion, Mitsotakis said that he wants to see expanded payments by credit card with more connections of cash registers with points of sale, which are themselves connected to the tax authorities.

Cash on property transactions will no longer be allowed; and most welfare allowances will be paid to credit or debit cards.

On the health system, Misotakis announced 10,000 new hirings 800 to the National emergency Assistance, as well as new ambulances for the latter. A coordination center will be set up in each of the country’s 13 regions and the goal is for city ambulances to respond to emergencies within 10 minutes. Emergency services will be upgraded in 96 hospitals and 156 health centers and four new hospitals built.

Mitsotakis said that all these actions, part of his pre-election pledges, will not compromise fiscal stability and that the goal of a primary budget surplus – excluding debt repayments – equal to 0.7% of the country’s GDP for 2023 will be maintained. “This is non-negotiable,” he said.

The Prime Minister added that cracking down on delinquency in all its forms will be a priority from now on. He also announced that 2,500 police will be released from VIP protection. His own security detail will be cut in half. “As for business people and other (private citizens), I’m sorry, but they must pay for their own security,” he said.

Mitsotakis also announced that, within four years, 80% of electricity should be generated by solar and wind energy and that there will be 10,000 charge points for electric vehicles.

Despite the disasters of this summer, a Greece that is stronger economically, socially and geopolitically is well placed for the future, Mitsotakis said.