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Antonis Samaras suggests a constructive shock in seven steps

12 May 2011 / 13:05:14  GRReporter
5501 reads

Maria S. Topalova 

Sharp reduction and simplification of taxes, supporting the construction business as the driver of the economy, immediate legalisation of illegal buildings and a resolute privatisation of state enterprises are some of the measures that the New Democracy leader Antonis Samaras presented in Zappeion Hall. The party’s program for emerging from the economic crisis includes renegotiation of the Memorandum of financial support by the European Commission, the European Central Bank and the International Monetary Fund. Samaras defined it as a "constructive shock" and presented it as 7 groups of measures.

The first measure is to simplify the tax system and to reduce the tax rate. The leader of New Democracy offers 15% flat tax for all businesses, tax reduction from the current 45% to 40% for people with higher income, reduction of VAT and excise duty on fuel, which is the highest in Europe at present. Antonis Samaras supports the full suspension of the practice of extraordinary taxation of physical and legal persons, which the PASOK government has turned into a permanent measure. Another proposal is to reduce employers' contributions by 25%. The program provides for reduction of taxes to third parties assuming its full cancellation within three years.

According to him, it is important not only to reduce the taxes, but to simplify them because the Greek tax system is too complex and bureaucratic now. He promised that his government would enforce only 4 tax laws - on personal taxation, on taxation of companies, on real estate taxation and on VAT.

The second step offered by Antonis Samaras is to eliminate the requirement of proving the origin of money when purchasing the first, the second or the next house. In his opinion, this requirement does not contribute in the fight against tax evasion, and the only thing it does is to freeze the real estate market. The blue leader defined the construction business as the driver of the Greek economy. There is only one exception from the proposal - the politicians and the people who have held ministerial positions from 1974 onwards. Samaras proposes the requirement for proving the origin of money and bank deposits to be cancelled for a year so that all the capital outflow to return to Greece.

The third measure the opposition leader offers is stricter penalties for those who continue to dodge taxes, even at low rates. He emphasized the great difference with the current tax policy of the government, which he accused of considering every Greek taxpayer a criminal. Antonis Samaras insists on fewer contacts with the tax offices and more electronics and Internet services.

The fourth proposal of Antonis Samaras is the legalisation of illegal buildings, which he called to be made immediately and resolutely. In this way, the budget would gain 1 billion euros in revenues within a year. Immediately after the legalisation, the country should be shot and new draconian penalties should be introduced for the illegal constructions. Samaras excludes from legalisation only buildings in archaeological sites, in forests and in places where they are dangerous from the seismic point of view.

The fifth step is the state to pay its debts to the citizens, i.e. the so-called domestic debt. This involves the unpaid VAT, the non-payment of lump-sum payments on retirement, the non-payment of salaries. According to Antonis Samaras, this step would mean spending for the state, but it would revive the market and then it would return to the state in the form of taxes.

The obligation of banks to lend money within 20% to 30% of the money taken as government guarantees the New Democracy leader described as the sixth step in the party’s program for emerging from the economic crisis. So far, they have taken 63 billion euros and are about to take and another 30 billion euros. Samaras stressed that it is not possible a single bank to do that, but all together should undertake to do it. Otherwise, thousands of companies would go bankrupt, he warned.

The seventh measure is the state to subsidise up to 2% of the purchase of the first home, to clear the legal obligations of large areas and to attract construction consortia to build permanent housing complexes. This practice, according to the New Democracy leader, is applied in many Mediterranean countries and brings good results. Generally, the conservative opposition relies seriously on the construction business, expecting it to bring annual revenue of around 2.5 billion euros for the first two years.

The leader of New Democracy supports the privatisation of the national electricity company of Greece, which should be broken into separate companies and privatised through a strategic investor. The next most important enterprise to be privatised is the state railway company. The opposition leader supports the privatisation of all state enterprises except the state lottery. According to him, it brings a lot of money in the budget and should not be "gifted" to anyone.

The program of New Democracy was presented to lawmakers, former ministers from the government of Costas Karamanlis, academics and journalists in the crowded Zappeion Hall. The President of the Athens Chamber of Industry Constantinos Mihalos and the President of the Federation of Greek Industrialists Dimitris Daskalopoulos presented the business circles. The chairmen of the two largest Greek unions GSEE and ADEDI also followed the speech of the blue leader with great attention. The audience often interrupted Samars and applauded him.

Tags: Antonis SamarasNew DemocracyProgram for emerging from the crisisPolitics
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