Main Opposition New Democracy (ND) leader, Antonis Samaras expressed his views on the plan to fix Greece’s finances in an interview with The Wall Street Journal, his first with international media since becoming Greece’s main opposition leader.
”Instead of strangling the Greek economy with tax increases, Europe and the International Monetary Fund (IMF) should let Greece cut taxes to jump-start growth”, Samaras said.
”The austerity programme for Greece is a failure,” Samaras said in his interview. Emphasizing on Greece’s poor tax revenues amid a worsening recession, he said: “I think our lenders will have to change their policy. My question is why do we have to go further down the drain in the meantime?”
Samaras also warned that ”Greece will again fail to meet its budget targets under current policies and in three months we’ll be asking for more money”. Last week, the ND party voted against a new, five-year, 28 billion euros austerity plan in a crucial parliamentary vote. The ruling PASOK party, however, passed the tough measures which the European Commission, the European Central Bank and the IMF have made a precondition for extending any new financial aid to Greece.
Despite agreeing with government plans to cut spending and sell 50bn euros of state-owned assets, he argued that the latest tax increases will only compound Greece’s economic and fiscal woes.
The solution, he said, is ”to slash corporate taxes rates to 15 per cent from 24 percent now, while also lowering taxes on everything from personal income to tourist lodgings to fuel”.
Sharply lower tax rates, Samaras added, would produce a “creative shock” that would stimulate business investment and consumer demand, while also reducing incentives for tax evasion, which is a chronic problem in Greece.
“Part of economics is psychology and you need a demonstration effect to show investors that this is an economy that you can invest in – whereas right now, money is being taken out of the economy and supply is being killed,” the ND leader added and continued saying that ”the resulting growth would close Greece’s budget deficit faster than the grim austerity plan demanded by Greece’s international creditors”.
He also mentioned in his interview the statement he had made once to Chancellor Angela Merkel: ”Look, if your plan works, then I am wrong,” Samaras said. “But if it doesn’t work, then you are going to need a new plan and I’m the one who can bring that about.”
Source: (athensnews)
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