Greek parliament discussed the government’s so called holistic Growth Strategy for the post-bailout era, which was recently presented by Prime Minister Alexis Tsipras.
During the heated debate in parliament, Alexis Tsipras presented the key features of his plan to promote growth in Greece in coming years. However, the debate veered off into other issues, such as the talks to resolve the FYROM name dispute and the various violent attacks carried out by extremists in recent weeks.
The government’s growth plan – which will be put to creditors at Thursday’s Eurogroup meeting – was leaked to news portals in its entirety ahead of the debate.
Local reports chose to focus on the fact that no reduction of the ENFIA property tax was expected by the coalition, which still expects to collect a total of 2.65 billion euros per year from the unpopular tax. Additionally, it was reported that a pledge made by the PM to increase the minimum wage in coming years is tied to conditionality and a prospective increase will be conservative.
Greece’s growth strategy foresees an average economic expansion of 2.1% from 2020 to 2022, supported by stronger private consumption (1.2%), job growth (0.4%) and a 7.6% pick up in investments. This is the forecast of the Greek government for the post bailout period, in the 106 page document, which targets economic and fiscal stability and a resilience to external shocks. The government’s action plan also recognizes an obligation to keep the primary budget surplus at 3.5% of GDP until 2022.
Addressing the House on Wednesday, the Greek Prime Minister focused on his government’s record in the economy and the efforts to “exit the memorandum era” which, according to the PM, is “proving to be successful”.
Alexis Tsipras was heavily critical of the main opposition, accusing New Democracy of defending the tough demands of the troika, against the government’s efforts to support workers and the poorest members of society.
“The memoranda are finally ending in August 2018 and New Democracy doesn’t like this because we are succeeding where they failed” the Prime Minister said. Moreover, Tsipras presented a series of pledges to support labor and boost the economy, which are included in the government’s Growth Strategy. He went on to urge Kyriacos Mitsotakis to present his own plans.
Commenting on the coalition government’s Growth Strategy, Mitsotakis dismissed it as “generic wishful thinking” and a “fourth MoU”, while criticizing the “failed economic policy” implemented so far. “It is a growth plan without growth” he said, which “lacks vision and applied policy”.
“The return to growth and the clean exit from the bailout are myths” the ND leader charged, adding that the IMF and European Commission have already revised Greek growth estimates downwards. He went to say that the government has managed to “destroy the middle class” and “push even law-abiding citizens to avoid paying their taxes”.
According to Mitsotakis, when the current bailout program expires in August 2018, the country will no longer have access to cheap funds, leaving it merely to apply agreed austerity measures. He went on to urge the Prime Minister to follow the examples of Cyprus, Ireland and other bailed out countries, instead of opting for economic policies with little chance of success.
“Markets will be very strict if they see any backtracking in the implementation of reforms” in future, Mitsotakis warned, adding that the government has not presented plans to safeguard the economy in the post-bailout era and secure proper funding. The ND leader also accused the government of plunging Greece further into debt over the three years it has been in power and locking the country down to fresh commitments and strict surveillance in coming years.
The Movement for Change party leader, Fofi Gennimata, launched a scathing attack on the government and the Prime Minister personally. She went on to urge Tsipras to call an early election immediately as “the country desperately needs a political change and a credible government”.
Gennimata also attacked the government’s rhetoric on the economy and Tsipras’s claims that he is leading the country out of the bailout era. “The clean exit is a pipe dream, nothing more than a fourth memorandum without any funds” Gennimata charged.
The center-left party leader was also critical of the government’s handling of the FYROM name dispute as well as the vast appointments being made to the civil service./IBNA