The head of the Bank of Greece calls for a review of tax breaks

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The head of the Bank of Greece, Yiannis Stournaras, on Tuesday demanded that the political leadership of the Ministry of Finance review all tax benefitsadding that “the country needs revenue.”

Stournaras spoke at a conference organized by the think tank “Κύκλος Ιδεών”. He also argued that the revenues expected to be received by the government from the sale of shares held by the Financial Stability Fund, although small compared to those allocated to bail them out, were not small considering the benefits received by it from the PSI, as well as the high dividends of the Bank of Greece, coming mainly from the ELA (including the liquidity it provided to the banks).

He emphasized once again that the volume of the “black” economy in Greece exceeds 40 billion euros, pointed out the need to reconsider the social utility of existing tax incentives and determine whether they truly benefit vulnerable groups of the population. The head of the central bank said that Greece “came back from the brink and is now an international success story”.

He also recommended continuing “balanced fiscal policy”to double the primary budget surplus to 2% of GDP in 2024. He added that government debt was falling rapidly and estimated that real wages in the country would rise this year.

As for banks, he noted that they are sufficiently capitalized, despite the fact that 50% of their capital is deferred taxes, and expressed hope that strategic investors will show interest in National Bank and Piraeus Bank after Unicredit expressed interest in acquiring 9% shares of Alpha Bank.

As for the dynamics of interest rates, in his opinion, if in August 2024 inflation falls below 3% on a permanent basis, the European Central Bank (ECB) will most likely begin to slightly reduce key interest rates.

Whether the population will withstand such tax reforms is no longer important to the country’s leadership…

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