TIF: PM Mitsotakis sets new growth target, announces new Energy Transition Fund

Prime Minister Kyriakos Mitsotakis on Saturday began his speech at the Thessaloniki International Fair (TIF) 2021 by addressing the younger members of the seated audience, telling them that “you are in the front row because you are this country’s priority, the generation who was tried and tested the most in recent times.”

Under the background motto ‘Greece is changing – It walks ahead – It gazes upwards’, Mitsotakis delivered the customary Prime Minister’s speech on the government’s economic policy at the city’s Vellidio Congress Centre, saying said that it is indeed the younger generation “who is anxious about their course in life, which they may be thinking that it is “paved with opportunities for a few and traps for most.”

But Greece needs new protagonists and “you are them,” noted Mitsotakis, before outlining the national action plan for young people: “You grew up in the recent financial crisis, in pandemic-induced lockdowns, and you are experiencing the climate change crisis. I pledge to fight to change this image with you in the foreground.”

Newly hired young people up to 29 years old, without previous working experience, will be subsidized for 6 months by the state with 1,200 euros upon first recruitment. 600 euros will be given to employers, and the remaining 600 euros will be given to these young workers on top of their salary to spend as they wish, explained Mitsotakis.

Moreover, as of 2022, subsidized new jobs will increase to 150,000 from 100,000, while student housing allowance will be extended to students at private postgraduate educational institutions for vocational training (IEK), he noted.

Additionally, as of January 1, 2022, the special fee for mobile telephony and data is zeroed for those aged up to 29, while vaccinated teenagers between the ages of 15 and 17 will receive 50 GB of free data on their mobile phones. The new digital services card for young people will also be established in 2022, he added.

Briefly staying on the subject of mobile telephony some more, Mitsotakis said that all individuals and businesses will pay a flat 10% in mobile telephony tax fees as of 2022.

Moving on, Mitsotakis mentioned the so-called parental gift deeds, the legal document which transfers ownership of a piece of real estate from a parent to an adult descendant as a gift or a donation. Tax on these types of parental deeds up to the value of 800,000 euros is abolished as of January1, 2022.

Workers in the private sector will stay exempt in 2022 from paying solidarity contribution tax, while a reduction of 3% in insurance contributions for these workers will continue in 2022. Business tax will see a permanent drop to 22% from 24%, while capital raising tax is being reduced by half.

“We are introducing discounts for green capital,” noted the premier, as small and medium-sized enterprises that merge will be taxed at only 15.5% as of now. This measure will be in force for three years, “as it is important to strengthen SMEs, he added.

In terms of the broader economy, Mitsotakis said that “we are announcing the revision of the growth target for 2021 from 3.6% to 5.9%, in an economy that will give opportunities to every citizen, without leaving anyone behind.”

Everyone’s income went up by 4% during the coronavirus pandemic, said Mitsotakis, but noted that the government “will not stay idle in the face of global price hikes.”

To this effect, three targeted measures are introduced: lower VAT tax for cafes and travel or transport, strict implementation of the law on unfair corporate competition and profiteering, and the provision of state subsidies against price increases that affect every household; these include a 30% reduction in income tax for individuals who spend up to 5,000 euros in electronic transactions in specific sectors (plumbers, electricians, home services, taxis, legal services, among others), a 6% reduction in animal feed prices for farmers, and a 20% increase in heating oil subsidies.

Most households will pay reduced property tax (ENFIA) in 2022, said the prime minister, and he also mentioned an imminent reduction of tax for gyms and dance schools down to 13%.

Greece is also setting up an Energy Transition Fund, he underlined, allocating 150 million euros to it, and which will absorb up to 80% of price hikes in electricity costs: “this practically means that increases in electricity prices will be reduced or even eliminated altogether.”

Greece’s overall economic performance is one of the best in Europe, he noted, “(…) despite all the challenges. It is stronger financially, geopolitically, and more powerful in terms of its defense capabilities. Its image abroad has changed and its prestige has been strengthened.”

Concluding, Mitsotakis assured that he is more optimistic than ever before: “As of today, a new, exciting journey begins, which we will all take together, putting into practice the motto of this year’s TIF (…) on the path shown to us by George Seferis and Mikis Theodorakis, who will always be by our side.”