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Greek Ex-Finance Chief Says Markets Eager for New Democracy Win

June 21, 2019

Investors are hoping for a New Democracy win in Greece’s July 7 snap polls, believing the Conservatives will be more business-friendly than the incumbent Radical Left SYRIZA, former finance minister George Papaconstantinou said.

Speaking to CNBC, he said “Markets are looking forward to a New Democracy win,” he said, with Prime Minister Alexis Tsipras having unloaded an avalanche of new taxes and tax hikes that pushed the corporate rate to 29 percent and hard core elements in the Leftists trying to keep out foreign companies and block major developments.

The Aug. 20, 2018 end of three international bailouts of 326 billion euros ($368.97 billion) didn’t bring a market return apart from a delicate 10-billion euro ($11.32 billion) bond sale at interest rates far higher than the rescue packages.

Markets in Greece have been volatile during a more than nine-year-long economic crisis that has seen the Athens Stock Exchange more of a roller-coaster ride and not for the faint of heart.

New Democracy leader Kyriakos Mitsotakis has promised a more business-friendly government if he takes power, including kick starting immediately the long-stalled $8 billion development of the abandoned Hellenikon International Airport.

He told CNBC last February that he wants to bring down taxes for domestic and international businesses in what he described as an “aggressive and comprehensive tax reform,” promising it would be done the first month he’s in office.

New Democracy is holding leads as high as 11 percent in surveys after Tsipras reneged on anti-austerity vows, allowed lawlessness in Athens to get out of hand, his party was sympathetic to a jailed terrorist killer, banks allowed to foreclose on homes and allegations the government hid the death toll of July, 2018 fires that killed 103 people.

Mitsotakis’ proposals include cutting the corporate tax to 20 percent in two years, which prompted Tsipras to promise he would bring it down to 25 percent by 2022 if he is re-elected, with polls showing that’s unlikely

Mitsotakis also said he will seek to renegotiate some agreements with the European creditors although there’s little wiggle room with three memoranda requiring whichever party is ruling to hit certain fiscal targets to avoid triggering automatic spending cuts and Tsipras going on a multi-billion euro rampage of handouts in a bid to regain favor.

”(Mitsotakis) is smart enough to know that (negotiating with the European Union) is not the first thing to do when you go to Brussels. You first show what you made of, you show you’re willing to do reforms where SYRIZA was not, you open more the country to investment and on the back of that you enter negotiations,” Papaconstantinou, also from New Democracy said.

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