Kyriakos Pierrakakis<\/b> announced new tax reductions<\/b>, interventions for housing and incentives for the development of closed homes<\/b> and support for businesses<\/b>.<\/p>\n
A clear message for continued pro-market,<\/b> pro-investment<\/b> and housing<\/b> tax interventions was sent by Kyriakos Pierrakakis<\/b>, revealing that the government is considering new relief measures for businesses<\/b> and property owners, as part of the effort to boost growth and tackle the housing crisis<\/b>. Speaking at the 4th Real Estate Conference of Capital.gr and Forbes Greece<\/b>, the minister referred to the interventions for rentals, the reduction of tax evasion<\/b> through the declaration of real rents<\/b>, the “My House” programmes, as well as the initiatives promoted at European level<\/b> to increase the supply of housing<\/b>, at a time when developments in the Middle East and energy uncertainty are causing intense concern in international markets and bond yields.<\/p>\n
“It is obvious that more burdens need to be removed from businesses<\/b>.” This was pointed out, among others, by the Minister of National Economy and Finance, Kyriakos Pierrakakis<\/b> in a discussion with the director of Capital.gr and Forbes Greece Spyros Dimitrellis<\/b>, at the 4th Real Estate Conference, on the topic, “New Era for the Real Estate Market<\/b> – Opportunities and Challenges”. And he gave assurance that these burdens will be removed, as much as possible based on the fiscal space<\/b> available and based on the prioritization<\/b> that needs to be done. Because, he said, there are acute social problems<\/b> that need to be addressed.<\/p>\nThe issues<\/h3>\n
On the housing problem, the minister said that this will be an issue, following a Greek initiative, at the informal Eurogroup on Friday in Nicosia. The “catch” is for ministers to see examples of countries where they have produced results and to judge what could be adopted by the rest.<\/p>\n
At the same time, he pointed out, Greece needs more housing supply, as there are about 794,000 closed main houses. And he referred to the measures taken to increase the supply of housing: First, the incentives (e.g. three-year tax exemption); second, the “My House 1” and “My House 2” programs (in the second program, according to May data, about 89%, of the amount has now been consumed and the number is about 15,000 loans); and third, the integrated framework of social consideration and utilization of public space.<\/p>\n
Mr. Pierrakakis appeared concerned about the picture in the bond markets in recent days due to the Middle East crisis and stressed that it is clear that an energy crisis should not turn into a fiscal crisis, and “you have to be able to be surgical in your response.”<\/p>\n
Spyros Dimitrelis: Yesterday you were at the G7, for the first time a Greek finance minister was at the G7. One certainty is the housing problem. The housing crisis is one of the certainties that exists, that nobody can dispute.<\/p>\n
Rent prices are soaring. Households, young people and young couples in particular, cannot find a home, cannot afford it, cannot afford it. They can’t easily buy a house because house prices that have gone up too much and financing is not that easy.<\/p>\n
A start-up capital is needed based on the research we saw before the recent one at the conference. I would like to ask you what is the government’s medium and long term policy on this housing problem and how you are putting it and as finance minister, head of the Eurozone Eurogroup.<\/p>\n
Kyriakos Pierrakakis: Good evening. It is a great pleasure to have the opportunity to talk with you again, Mr Dimitreli, and to say that, commenting on the first point, we do indeed now have this historic opportunity to now be able to shape the agenda much more effectively at the European level. As a country, this is a credibility that has been earned through the extraordinary efforts of the Greek people and the systematic work done by Kyriakos Mitsotakis and his government.<\/p>\n
Now, the housing issue is an issue that I must tell you is persistent and evident in every country and in every discussion that I have with my European counterparts and before I became President of the Eurogroup, every country in the European Union, not only in the Eurozone, is experiencing a version of this problem with its own characteristics.<\/p>\n
And usually in the European Councils what do we discuss? We discuss purely European issues, namely: the fiscal balance of each country, issues related to debt, now energy issues. The truth is that housing, housing, is an issue that has not been so much on the European agenda. It exists, but it’s something that we usually leave to the discretion of each member state.<\/p>\n
But we can’t have issues that are so much in the public’s mind that we don’t put them in European discussions. So, so in that sense, tomorrow I will go to Nicosia and on Friday at the informal Eurogroup we will have as an issue the housing issue, which is being introduced on our own initiative.<\/p>\n
What is the catch? The conception is to see good examples of what has worked in some countries, which we think could be adopted by others. Specifically present three countries with good examples of policies that they have followed. This is something very important to me, because we need to learn from the successes, I will say from the failures of others, especially the latter, we are not usually in the mood to share things that have not worked, but this needs to be done more. Now, what is it that we want to see succeed.<\/p>\n
We need more housing supply. First of all, we have a lot of foreclosed properties in the country. We have about 794,000 closed primary residences. Have we taken steps to increase the supply of these closed homes? Yes, we have. We have a three-year tax exemption. We have renovation programmes, which we have launched. More will be done in that direction. But the general concept is that when you have a ready supply stock that’s not being tapped, you want more incentives to get that out into the market. That’s the first one.<\/p>\n
The second one touches on the core of your question in relation to young couples. What was the philosophy behind the My House 1 and My House 2 programmes? To enable thousands of young people, 25 to 39 years old, to access housing by exempting a large chunk of the interest rate. And in that sense we see , in My Home 2 in particular, 89%, approximately, of the amount has now been spent with the May figures. We are up to about 15,000 of these loans. The target was cumulatively both programs 30,000 couples, 30,000 young people to be able to access housing.<\/p>\n
We have a comprehensive framework for social consideration for the first time. The whole programme of social renting and utilisation, essentially, of public space in a new framework of public ownership, we are now seeing it start to work in Peania, in Patras, in Larissa, in Serres.<\/p>\n
And, of course, not only quantity is not enough, we also need to look at the quality elements of the housing stock, where we have many energy upgrade programs there, which we also see them being consumed right now, being utilized, and we believe that they will also play their role.<\/p>\n
All of this, cumulatively, what does it give us? It gives us a policy that has pieces of the puzzle to a problem to which, I will tell you, no European country has raised its hand to say “I have the ultimate solution to the housing issue”. No one has, if you like, the one and only truth in this. I think we need to see how many more measures we can implement, each country individually, in conjunction with the others, to help with an issue which, as you say, has strong social characteristics.<\/p>\n
Spyros Dimitrelis: But you said that you will have both positive and negative examples. That is, we can expect (you talked about incentives) and other interventions in favour of stimulating supply. Because “My House 1 and 2”, there will probably be a third one, we will see that, but “My House 1 and 2”, the criticism is that it went and boosted demand, and as a result prices went up, and the problem is supply. So what can we expect?<\/p>\n
Kyriakos Pierrakakis: I think we’re doing things together that we can see are working. And we’ve already done a lot of things in relation to tax rates, as you know.<\/p>\n
I mean, I can cite that the cumulative policy that has been followed by the government in terms of taxation, 1\/3 of the ENFIA has gone, especially because the 13,000 settlements have been reduced by 50% in our villages, up to 1,500 inhabitants. Now comes the other 50%. In fact, we are actually eliminating the ENVIA in 13,000 settlements. There is the third tax exemption, which I mentioned. We put in the interim rate, which the Prime Minister announced, and we are implementing the 25% rate from January. Because indeed, the scale from 15% to 35% was really steep.<\/p>\n
And of course there is the dimension, of a measure that has already been introduced, which is the one rent subsidy, which is subsidized on the basis, so it goes back to the tenant for a huge percentage of tenants, about 86%, based on the fact that it will be declared on the tax return. A measure which, to repeat, again, the European experience, as I have discussed it with my European colleagues, we see it very positively, because in our case it was not only the dimension of supporting our fellow citizens who are in rent and want to be supported more, it also had the dimension of revealing (transparency) the real rents. Because as a matter of fact, I think everyone here can agree, it is not the average rent in Greece, 255 euros a month for the lady’s house.<\/p>\n
So we are waiting to see and how this measure will go. Let me also say that, as you know, for civil servants we refund two rents per year, not one rent per year. I think we will have an immediate picture of how this measure has gone, from the progress of the tax returns. But I have to tell you that the reason we did it was really to accomplish both at the same time. To not have underreporting, but to have support where it’s needed.<\/p>\n
Spyros Dimitrelis: The Prime Minister had said during the announcement of the measure from the floor of the TIF that it is a first step and if property owners respond and disclose the real rents, that is, if tax evasion is reduced, then he is open to a new intervention to reduce the rates of the tax scale for rents. Are you in a position at this time to tell us whether the measure has finally worked and whether you are prepared to make a new positive intervention in view of the September TIF?<\/p>\n
Kyriakos Pierrakakis: I would not take the initiative to announce TIF measures now. You understand that this is the Prime Minister’s prerogative and concerns the TIF itself. Despite the fact that until the TIF we discuss what will be said at the TIF and then we discuss the next one. But what I can tell you is that as a general direction we are not thinking in terms of fragmentation.<\/p>\n
I think you also saw it as a shift in philosophy at the last ICF. What did we do there? Whereas usually there is a list of measures that even you with your vast experience of covering financial reporting for so many years. If I ask you to recall what happened at that year’s TIF and what measures were announced, you will find it difficult. And I will have a hard time as finance minister.<\/p>\n
Spyros Dimitrelis: Only one TIF in 2015, if you remember, that was…<\/p>\n
Kyriakos Pierrakakis: I remember that one very well. But especially in the last one I think there was a dimension of having a unified philosophy that includes all the measures. I think you found that we basically had a reform. What was the conception: all the measures are included under a single philosophy.<\/p>\n
Greece has an acute demographic problem. It also needs to support the middle class more. So all the measures were wrapped around a single philosophy. This showed that we were thinking not only in terms of the next six months or the next year. So one TIF away, so to speak, we are thinking in terms of what needs to be done in Greece for its big problems three and four and five years from now.<\/p>\n
What did the prime minister say at the New Democracy conference that just passed: “Greece in 2030”. So to cut a long story short, the answer to your question is what do I think the answer is? It’s not just based on what will be announced in September.<\/p>\n
Based on what we see that needs to happen by 2030, we understand that other burdens need to be lifted. And I think we have the credibility as a government, having reduced 83 taxes and contributions, and especially in this area I mentioned before examples in the reduction of ENFIA and the three-year tax holiday and the introduction of the 25% rate, I think we have the credibility that as fiscal space is created, as the economy does better, we see the obvious positive dynamic that any such tax removal creates.<\/p>\n
Spyros Dimitrelis: Minister, let me take this opportunity because you’re talking about this, is it true from the reporting that we’re hearing, what we’re hearing, that the priority at this TIF is going to be business. In the last TIF it was the family, demographics, households, is the priority in this TIF for tax interventions for business?<\/p>\n
Kyriakos Pierrakakis: I will not talk specifically about what the Prime Minister’s speech at the TIF will include. I will tell you that business is always our priority. And if you don’t look at the reduction that has been made in the business tax, if you look at a number of measures that we have taken as a whole, from our entire policy. In general and as a person I dislike fragmentation. Governments are not judged even by a TIF, even by a speech of Kyriakos Mitsotakis or another speech of the Minister of Finance…governments are historically judged by what they do in the years they govern. I think having reduced 83 taxes and contributions, having reduced the corporate tax to where it is, having done the digitization of the state which has as its ultimate recipient businesses…we have done a lot of things.<\/p>\n
Indeed, more needs to be done. I experience it every day in my interaction with both large enterprises and small and medium enterprises. It is obvious that we understand that other burdens need to be removed. I assure you that we will remove them, as much as we can, based on the space we have in front of us and based on the prioritization that needs to be done, because we understand that there are acute social problems that we need to address.<\/p>\n
Spyros Dimitrelis: As we said, yesterday for the first time a Greek minister participated in the G7, the seven most powerful countries on the planet. We are living in a crisis that has become an energy crisis and tends to become an inflationary price crisis, because of the war in Iran and the Straits of Hormuz that are not open…I will ask you, Minister, to convey to us a little bit what climate you took in from where you were yesterday.<\/p>\n
Is there a lot of concern? Is there any certainty that we’re going to get through this easily? Is there a complacency? Is there an optimism? What is the mood that you saw yesterday at the G7?<\/p>\n
Kyriakos Pierrakakis: As rightly – your question is hypothetical – indeed as far as climate I can convey, because discussions, as you know, are private, especially at this level…but the climate is that there is a growing perception, because there was, if you like, a public discussion and in relation to, I will say directly to the relations between Europe and the United States or more broadly globally, about whether we can formulate international solutions to international problems.<\/p>\n
This – in too many cases – has been the anxiety that it can be called into question. I think we have a growing understanding, all of us, all of us sitting around the table, that problems like “artificial intelligence and how to regulate it globally” or “the Strait of Hormuz crisis and the resulting crisis in the Middle East”, all of these together cannot be solved by a single country, no matter how big it is. It needs orchestration. All the participants at this table understand that. And there is, if you will — there is no complacency by any means. There is anxiety about the fact that some things have to be resolved at the right time. And there is the initiation of the appropriate solutions, in my opinion. From there we are alert because – because you mentioned the Straits – what will determine the depth of the problem? Certainly the length of time for which the Straits will remain closed. If the Straits stay closed, we know that every month will be worse.<\/p>\n
Everybody knows that. It is a phrase that the Managing Director of the International Monetary Fund has said. By staying closed, June is worse than May and July is worse than June.<\/p>\n
But it’s the duration, it’s the depth of the problem in terms of the energy facilities that may have been hit, how quickly they can come back, and it’s the status that will exist in the Straits after they open. For us, the Straits cannot be a toll road. They have to be open to global navigation. This is something I have to say is of particular interest to Greece as a maritime country. So, we understand all this. Europe is part of the solution, not part of the problem. And we want this solution to be able to come forward and close very quickly. Now from there, the question for us is, and it will be asked in the Eurogroup now on Friday as well, as it has been asked every time lately, because you mentioned a density of crises and I have to say, having been elected chairman of the Eurogroup in December, in every Eurogroup I feel that we also have a crisis to deal with. Not only this one… we also had the Greenland issue in the first ones… so we have problems that we are constantly discussing. What has the Commission come to tell us? That the measures must be temporary for sure.<\/p>\n
This is the sine qua non, the most basic element. That is, you have to be able to quickly be able to remove these measures so that you don’t create a permanent inflationary trend in the economy. Because to put it simply… it’s a gift. They have to be ideally targeted and parameterized. Most countries have done that, to a very large extent. Some measures are horizontal, because we judge that in our national interest…let’s say on diesel and diesel subsidy, it reduces the inflationary trend, if you have a horizontal subsidy…but beyond that, it is certain that the faster the Straits are opened, the better it will be for any economy. Certainly Greece is coming into this discussion – because you mentioned decades ago… 2015-type of things – Greece is coming into this discussion with a different fiscal weight than it would have come in the past. It has other possibilities now. Again, with the extra efforts of the Greek people, with the efforts of this government, we are able to absorb crises and problems more effectively when they arise.<\/p>\n
Spyros Dimitrelis: Let me just dwell on that a little bit, Minister. We see that the markets are beginning to price in the risk that economies, countries, will be affected fiscally by the prolongation of the crisis in the Strait of Hormuz. Bond yields have been pinched, bond prices have fallen. I would like to ask you if indeed this development, if prolonged, could affect the government’s overall fiscal planning.<\/p>\n
Kyriakos Pierrakakis: Government fiscal planning interacts with the fiscal rule of the European Union. Where there the fiscal rule is clear. That’s why I said Greece is coming to this discussion with other possibilities. We have high primary surpluses, we have net surpluses and we have the fastest-decaying debt in the world.<\/p>\n
Spyros Dimitrelis: So there is fuel, that is…<\/p>\n
Kyriakos Pierrakakis: …and there is the fiscal rule, which, what does it say in Europe? You’re going to spend what we agreed for the next few years, whether the economy is growing or the economy is in recession. To act countercyclically, that’s the logic of the rule. It seems more difficult in the years when we’re doing well and we say, “Why can’t I spend all my surplus?” just so that this can work in the years when there are difficulties. So, the fiscal planning is there. What is the differentiation in fiscal planning? The quality of it, what you do.<\/p>\n
Because de facto, you react one way when you have an energy crisis and you have to go, for example, to subsidize the price of diesel or support households with a fuel pass or fertilizer, and another way if there is no such thing. But beyond that, we are certainly concerned about the picture you describe.<\/p>\n
The picture that exists today, that exists in the bond markets in the last few days, is a picture that we are concerned about. Because it is clear that an energy crisis should not be turned into a fiscal crisis. So you have to be able to be surgical in your response. That is the goal. Because you know…I hear it from the opposition in Greece…some things sound extremely pleasant. But people in Greece have paid very dearly for an experience. The experience of losing the fiscal balance and what that means in terms of costs to society, which ultimately comes to hit the weakest, the poorest people the hardest. In other words, if Greece is financially derailed or a country is financially derailed, the people who will pay the most, to put it simply, are the most vulnerable and the weakest.<\/p>\n
Well, the difference between us as a country, do you know what it is? We’ve lived it and we’ve learned it. And that’s exactly why I know that people understand that we have to be “landlords”, to put it simply, in everything we do. And I think they see that.<\/p>\n
Spyros Demetrelis: You talk about “landlords”…I’m going to go to a political-European question. Lastly, Minister…we are running out of time. You are in charge of the Eurogroup. How do you see the possibility that an AfD finance minister or a finance minister from the French National Front will soon come to the Eurogroup to face you with what he carries with him as an agenda for solving problems: populism, demagogy, etc.? etc…;<\/p>\n
Kyriakos Pierrakakis: Based on the hat I wear as Eurogroup chairman, I have to answer you institutionally. And the institutional answer to that is that we interact and talk with all the European political families, based on certain principles, based on certain values and certain protocols. Europe’s fiscal rules…<\/p>\n
Spyros Dimitrelis: …you will be something like Mr. Dijsselbloem and Mr. Varoufakis, that is…<\/p>\n
Kyriakos Pierrakakis: …I’m not going to put titles of names. I intend to be Kyriakos Pierrakakis. But what I will tell you is that I intend to serve both the rules and the values that got me to this position. And above all and above all, beyond the European hat, the national hat that led the Greek finance minister to be there, which is the collective effort of a people.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kyriakos Pierrakakis announced new tax cuts, interventions for the housing sector and incentives for the development of closed houses and support for …<\/p>\n","protected":false},"author":1,"featured_media":6630,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-6629","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"acf":[],"_links":{"self":[{"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=\/wp\/v2\/posts\/6629","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6629"}],"version-history":[{"count":0,"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=\/wp\/v2\/posts\/6629\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=\/wp\/v2\/media\/6630"}],"wp:attachment":[{"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.tomanifesto.gr\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}