Looking for a way out with new reforms
The fragile political climate of the last few weeks, the intensity of trade union demands and warnings from bankers of the possibility of impressive company bankruptcies by summer have spurred the government’s economic team to action. Under pressure from all these factors, National Economy and Finance Minister Nikos Christodoulakis feels that he needs to move quickly in order to safeguard the economy from potentially hard blows. As the minister told Kathimerini, by June a cycle of reforms will have been carried out, with the aim of providing a basis for stability and development. He has realized that fiscal stability itself is threatened by the claims being made by unions and also by the ease with which most ministers have been asking for more funding. The dialogue on social security reform that began last week was the first step, and although the proposed changes look weak, they are exceptionally important in that they set 65 as the general retirement age. This will be followed in the next 20 days by the start of talks on the much-awaited reformation of the tax system, aiming at simplifying the system, creating greater transparency and bringing it in line with the rest of Europe. At the same time, on Friday Christodoulakis hastened to relieve 740,000 small- and medium-sized businesses of pressure by the tax department with a measure allowing the settling of about 10 million outstanding cases. This is expected to bring in revenues of about 2 billion euros to shore up State coffers. Next in line are a series of development incentives for businesses that will be discussed in a dialogue with the relevant social partners. Among the steps aimed at shaping a climate for growth will be efforts to make the labor market more flexible in certain better regulated sectors – such as banks and organized businesses – which have not been able to exploit the general disarray reigning throughout most of the economy, especially in small businesses. Overall, everyone has realized by now that the country needs radical reforms, if it wants to remain a member of the eurozone.
