The challenge for the next Greek government will be to convince the country’s creditors to give it greater fiscal “breathing space”, main opposition New Democracy leader Kyriakos Mitsotakis said on Tuesday. He identified the high primary surplus targets after 2018 as the “downside” of the Eurogroup’s decision on Monday.
“The great problem of the Eurogroup’s decision…is that it leaves the Greek government ‘trapped’ within an excessively tight fiscal framework, with medium-term primary surplus targets of 3.5 pct of GDP that go far beyond 2018,” he said, speaking to business people at the Metamorfosi town hall.
According to ND’s leader, Greece had failed to persuade its European partners that it was serious about implementing structural reforms, without qualifications or provisos, in order to ask for more fiscal space that would enable “more daring things in taxation.”
Mitsotakis insisted that he would move in the direction of lower taxation, however, coupled with greater tax compliance.
He also categorically ruled out large-scale dismissals of public-sector staff, except in the case of illegal hiring or extreme disciplinary offences. Public-sector reorganisation would require a “reassessment of organisational structures” and a clarification of roles and areas of responsibility, with mechanisms that allowed civil servants to be evaluated on their performance, he said.
Mitsotakis praised the role and importance of municipal local government but noted that this currently needed a radical overhaul in Greece, and a restructuring of the way it interacted with central government and the different levels of local government.
ND’s leader said he was certain that his party will win the next elections whenever these are held and that this will provide an opportunity to put the growth process into motion, though it would also require some “tough decisions”. He strongly criticised the government for “timidity” in carrying out reforms, noting that it could not rely only on an “economic rebound” due to the previous sharp recession.
“The “coiled spring” theory has some basis in an economy that has lost 25 pct of its wealth. But the spring will not release by itself. It needs a series of targeted policies,” he said.
“This government does not truly believe in the Greek economy and the various structural reforms…it implements them with great difficulty, without believing in them, and at the same time raises obstacles to the policies it is called on to follow,” he said.