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Economy

Greece’s COVID-19 Comeback Plan Includes Tax Cuts, Brain Gain

ATHENS – With restarting tourism stalled because of the COVID-19 Coronavirus pandemic the focus of Greece’s economic kickstart, Prime Minister Kyriakos Mitsotakis is also pinning hopes on tax cuts and bolstering entrepreneurs to get new businesses going.

The New Democracy government has poured 17.5 billion euros ($19.2 billion) into businesses closed during a lockdown that began March 23 and started gradually being lifted on May 4 in stages, much of the money going to laid-off workers in 800-euro ($877.79) benefits.

Speaking to the nation on TV, he said the three-pronged plan would be a bridge “from today’s uncertainty to tomorrow’s security.”

Mitsotakis said all unemployment benefits are being extended and that the government will also subsidize salaries and social security contributions for workers in the tourism sector. It will also pay unemployment benefits to seasonal employees who will not be hired this year.

The 24 percent Value Added Tax (VAT) for  travel by ship, bus and airplanes will be cut to 13 percent from June 1-Oct. 31, so that those who go on vacation in the summer “can do so at the lowest possible cost,” he said.

There will also be VAT reductions on coffee, non-alcoholic beverages and outdoor cinemas as Greeks have begun getting back to some semblance of a normal life while hygiene protocols including the wearing of masks and gloves in some places and social distancing requiring people to be at least 1.5 meters (4.92 feet) apart is in place but widely ignored.

Mitsotakis also announced that the second phase of the “Deposit to be Returned” program will be launched this month with 1 billion euros ($1.1 billion) allocated while the Business Guarantee Fund will also be activated, releasing 7 billion euros ($7.68 billion.)

“Businesses will thus have the opportunity to get quick and easy financing, with the state guaranteeing up to 80% of loans,” he said, the government wanting to grow its domestic firms at the same time he hopes to attract foreign investors. 

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ATHENS - Despite an accelerating economic recovery, many Greeks and households are finding it next to impossible to save money, caught between some of the European Union’s lowest salaries and highest tax rates.

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