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Economy

New Democracy Plans Relief for Crunched Greek Middle Class

February 11, 2020

ATHENS – After the former ruling Radical Left SYRIZA admitted deliberately overtaxing the middle class to meet demands from Greece’s international creditors, the New Democracy government said it would bring 1.8 billion euros ($1.97 billion) in breaks.

That was in line with pledges made before taking power in July 7, 2019 snap elections, with the government promising the relief package would be submitted to Parliament after the Easter holiday period, said Kathimerini.

Some 1.16 billion euros ($1.27 billion) will come by abolishing the hated solidarity tax on income that was introduced by a former New Democracy-led coalition in 2011 to help more vulnerable people, continued by SYRIZA.

The remaining relief would come from a 2 percent cut in social security contributions although it wasn’t said what the impact would be on a slowly recovering economy almost a decade after the first of 326 billion euros ($357.01 billion) in international bailouts began.

Those ended on Aug. 20, 2018 and Greece has been limping its way back into the markets although a recent survey found some 70 percent of people still live near or below the poverty line, showing how devastating the crisis was.

The measures are expected to bring an estimated increase of up to 4 percent in the incomes of millions of salaried workers part of a first round of breaks introduced in 2019 by the Conservatives last year.

The creditors, the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) must sign off as its envoys will be monitoring Greece’s economy for decades to make sure fiscal targets are met as part of the bailout deals.

One of the conditions, the paper said, is for an agreement on the lowering of a primary surplus target of 3.5 percent of Gross Domestic Product (GDP) which Prime Minister Kyriakos Mitsotakis said wasn’t sustainable and doesn’t include interest on debt, the cost of running cities and towns, state enterprises, social security and some military expenditures.

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