Home Economy Greek PM outlines new financial aid plan to kick-start the economy

Greek PM outlines new financial aid plan to kick-start the economy

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Prime Minister of Greece, Kyriakos Mitsotakis, has announced a plan to kick-start the Greek economy with a 24 billion euro program aimed at businesses and employees recovering from the coronavirus lockdown.

The new program will involve targeted tax cuts including, but not limited to, a reduction of value-added tax on transport, coffee, tourist packages and cinemas from 24 percent to 13 percent until October 31.

“In the coming months, we need to demonstrate the same maturity and discipline as we did during the lockdown. I never hid the fact that the fight for life will have a heavy economic impact,” Mitsotakis said in a televised address.

Moreover, Mitsotakis stressed that worker salaries in the tourism, catering and industrial sectors will also be subsidised through the European Union’s SURE program, from which Greece expects to receive a total amount in excess of 1.4 billion euros.

Following on from the Prime Minister’s address, the Greek Finance Minister, Christos Staikouras, released a detailed list of the measures included in the new program. They include:

  • Expansion of a measure to put workers’ contracts under suspension, payment of compensation and covering social insurance contributions (in the sectors of tourism, restaurant, transport, culture and sports).
  • A new mechanism to support short-term employment is being created to preserve job positions and support business activity.
  • Offering unemployment benefits to seasonal workers who will be employed during this tourist season, along with subsidising social insurance contributions for seasonal part-time workers.
  • Suspension of payment of debt tranches to the tax agency for all enterprises which remain closed, along with the sectors of tourism, restaurant, transport, culture and sports, for June.
  • Expanding a measure for 40 percent reduction of rent payments in June for all enterprises remaining closed, along with the sectors of tourism, restaurant, culture and sports. This measure also applies to individuals for their primary residence and to students.
  • For real estate owners, leasing their assets to enterprises and workers hit by the crisis, a suspension of tax payments is offered.
  • Enterprises will be offered a second round of refundable advance payment.
  • The government is offering a reduction of advance tax payments for 2020 and 2021 to enterprises hit by the crisis.
  • Reducing VAT on transport, coffee, beverages, tourist packages and cinema tickets for the period June 1-October 31, 2020.
  • Tax deduction of spending on scientific and technological research.
  • Creation of a National Registry of Startup Businesses.
  • Creation of a program that will subsidise primary residence borrowers hit by the pandemic.

Staikouras concluded his statement by announcing that the fourth phase of Greece’s economic plan will begin in September.

READ MORE: Greek economy hit hardest by the coronavirus pandemic, EU says.

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