The President of the GSEVEE, Mr. G. Kavathas, attended the joint meeting of the Standing Committee on Economic Affairs of the House with the Committees of Social Affairs, Public Administration, Public Order and Production and Trade for the multifunctional bill ” 4387/2016, measures to implement budgetary targets and reforms, social support measures and labor regulations, the Medium Term Financial Framework 2018-2021 and other provisions. ”
The position of the President of GSEVEE in the M / V is as follows:
The bill tabled by the government, in the form of urgency in the Greek Parliament, completes another cycle of violent interventions in the Greek economy and society. After seven years of joining the most rigorous fiscal austerity program ever implemented in economic history, which has not been imposed on losers in the World War, it is now clear that we are moving into yet another round of additional burdens that inhibit recovery prospects and maintain The economy in a stagnation trap. GSEVEE considers that with this agreement, instead of releasing the productive forces of the site, they are further rigged into a spiral of internal depreciation and degradation. The deal is a necessary condition for overcoming the crisis, but not capable of creating a new beginning. GSEVEE estimates that these new measures will, in the medium term, mainly hit the backbone of the Greek economy, which is small and medium-sized enterprises, to the benefit of larger companies of foreign and domestic interests.
The sacrifices of the Greek society and the productive base may have led to tangible and impressive fiscal results, but have not been capitalized at the level of employment growth, business environment improvement, growth prospects, social policy. Moreover, ELSTAT’s recent data confirm the slowdown in the economy (-0.5% of GDP in the first quarter of 2017). Over the next four years, additional public finance interventions of $ 5 billion are expected to remove resources from the real economy. According to the projections of the Medium-Term Program, it is assumed that GDP growth will be limited to 1.8% for 2017, while private consumption and investment will be adjusted accordingly. We must emphasize that in the past similar forecasts during periods of stagnation were not verified due to the continued commitment of economic policy to austerity.
Besides, none of the countries that were under a memorandum and / or surveillance regime in the past years has been forced to stand for such a tight fiscal and reform framework for decades, which strangles the national economy and the productive base. Institutions and economic analysts know that spending cuts and taxation have not even reached half of the other countries in the region that have pursued a restrictive economic policy, and even today there are countries that have gained a transition time to adjust their budgetary outcomes. This time is undoubtedly to the benefit of their national economies. And this fact is clearly the big failure of the Greek political system as a whole to present and negotiate a national plan to exit the crisis, with commitments, timetables, a smooth political cycle but also with specific red lines.
This bill, in addition to continuing austerity, paves the way for a new deregulation of the business environment that will lead other small businesses to exit and euthanasia. At the same time, the so-called counter-measures, which are certainly a positive aspect, are not sufficient to ensure a sustainable social and developmental model. Indeed, they will come into force after the end of 2 years, at a time when the usefulness of such interventions will be undetermined.
On the articles of the SBC, GSEVEE submits the following positions:
1) Article 1 shows the new pension reduction to be calculated from 2019 onwards. This arrangement leads to a further reduction in household disposable income, which will negatively affect consumption not only in the year of intervention but also in previous years (because pensioners will discount income reductions and reduce spending from today ).
(2) The benefits provided for in Articles 3 to 9 are considered as positive, however, some benefits (such as free medical care) are limited to a very small proportion of the population (with an income of up to € 1200), which makes them inactive. Many ornamental, with the risk of benefiting social groups with lower real exposure to poverty and social deprivation. GSEVEE considers in principle that health care should be provided to the population as a whole and that at this stage there should be a revision of the threshold for membership of the official level of relative poverty, according to ELSTAT (about 5,000 €). For school meals, a program of equal participation of local businesses in award procedures should be provided, with an emphasis on healthy and Mediterranean diets.
3) Improving modifications (Articles 10-14) concerning income tax, solidarity levy, business profits tax and ENFIA are positive but marginal as they will be applied conditionally after 2 years and are considered to be insufficiently quantifiable. There will be a wave of high burdens, the effects of which will be dilutive for domestic entrepreneurship and consumption.
4) The bill provides for disposal of 300m. In addition to the Public Investment Program for projects in the fields of agricultural production, processing, green energy and small and medium-sized enterprises. The provision is positive, but the way and the flow of funding will determine the success of the action.
5) Interventions at work are deferred (PART B, Articles 16-20) and do not improve the existing framework in the labor market. Collective bargaining is delayed, while priority is given to collective redundancies by delegating responsibility to the IAC to check the validity of the company’s decisions. This arrangement protects in part from the full release of redundancies.
6) It is positively considered to modernize the public procurement framework in the health sector (PART C), although today it is a question of providing quality health services and universal access to the pharmaceutical and healthcare services of the population. There is also a research and development support project on the domestic drug market and on medical devices, as well as actions related to the development of parallel health activities such as medical and thermal tourism (actions that can increase the income of social security institutions) , Attracting young scientists, improving public and private hospitals, and making good use of the wealth of insurance funds.
7) The framework for regulations on PART D on transparency in party financing as well as the taxation of parliamentary allowance is also positively assessed.
8) Amendments are provided for in the non-judicial mechanism for settling debts (Article 46) where there is a divergence of opinion between the amount declared by the debtor and the amount certified by the creditor. Most importantly, however, it is very important that the procedures for the implementation of the provisions of Law 4469/2017 are immediately initiated, as it will be beneficial for both businesses and the banking system. In any case, the extrajudicial mechanism should be extended to households, ideally prior to the application of Article 59 on electronic auctions, because otherwise companies will be forced into liquidation. Against this background, we consider the provision (Article 65) that provides for the protection of civil servants and bank employees undertaking corporate debt restructuring.
9) GSEVEE considers it unlawful politically and counterproductively to provide Article 58 for the new calculation of business insurances, based on the sum of taxable income and contributions payable last year, as mathematics leads to the closure and exit of enterprises from the market. On the pretext of achieving the viability of the insurance system and improving the recoverability of the new system, and despite the complaints of all the productive bodies about the excessive charges of the Social Insurance Act 4387/2016 on middle income, the government and institutions decided to correct for the worse The mathematical formula, leading to increases of up to 30%. Indeed, it will burden businesses more, with no tangible effects on collectability, which has already begun to subside in recent months.
10) The measure for the liberalization of the operation of the stores 30 Sundays per year (Article 49) with a legal provision and on the pretext of attracting tourists is indicative of the precariousness with which the productive composition of the economy is dealt with and studied. During the crisis, it has been argued by researchers, officials and institutions that the structural problem of the Greek economy is the high-consumption model that is at the expense of competitiveness and investment. The adoption of this measure effectively cancels this argument, since it is in itself aimed at increasing consumption (which, of course, does not happen with lower and overstated incomes). At the same time, it is very likely that the measure leads to a substitution of consumption and an increase in the share of imports, to the detriment of the current account. Finally, we repeat once again that the experience of the 8 Sundays has shown that neither the turnover is increasing (indeed in the previous months there has been a vertical decline), but neither the prices nor the unemployment due to the implementation of the measure will decrease. No study abroad has demonstrated a positive impact on local economies and the wider economic environment than the application of full liberalization of branch operations. Accordingly, the liberalization of the sale of DISY (Article 86) creates conditions of concentration and monopoly on the medicinal product market.
11) Under Article 81, they are transferred to the Hellenic Holding and Property Corporation (EDIS) in order to benefit from the participation of the Greek State. However, it should be investigated whether the alleged privatizations are such and benefit, as it is common for Greek public and private companies to buy from foreign companies that are part of the state sector of another country.
(12) Intervention in the markets for the sharing and short-term letting of immovable property (Article 84) is necessary, but the imposition of an overnight stay in the rented rooms is unnecessary at this stage.