Bloomberg News

Samaras Says He’ll Boost Growth, Cut Tax If Victorious in Greece

April 22, 2012

Antonis Samaras, head of Greece's New Democracy Party, speaks during an event to present his economic plans at Zappeion Hall in Athens on April 22, 2012. Photographer: Angelos Tzortzinis/Bloomberg

Antonis Samaras, head of Greece's New Democracy Party, speaks during an event to present his economic plans at Zappeion Hall in Athens on April 22, 2012. Photographer: Angelos Tzortzinis/Bloomberg

Greece’s New Democracy party would slash state spending, sell assets and lower taxes to boost an economy stuck in a fifth year of recession if it got a clear mandate to govern in the May 6 elections, leader Antonis Samaras said.

“I need your vote to create political stability to send a message of economic revival,” Samaras said in a speech in Athens, televised live on state-run NET TV. “We ask for a clear mandate and a strong majority to do what is needed for the country.”

Samaras promised a flat 15 percent corporate tax rate, lower sales taxes to boost growth and investment and an amnesty for those bringing deposits back to Greece. He’d avoid the across-the-board pension and wage cuts that have driven the economy into the worst slump since the end of World War II and said cutting waste would be the foundation of his fiscal policy.

Samaras’s election pitch comes as opinion polls show his party is ahead, though still short of enough votes to win an outright majority. Cooperation between New Democracy and Pasok, Greece’s two largest political parties and current government partners, might garner enough votes to cross the 151-seat threshold needed to form a majority government, according to the most recent polls.

Austerity Measures

At stake is whether a new government can implement austerity measures on which bailout funds depend. Failure to keep to those pledges, which underpinned a 130 billion-euro ($172 billion) second rescue package earlier this year, could threaten Greece’s place in the euro area.

A new government must in June spell out to the European Union and International Monetary Fund how it will find 11 billion euros of budget cuts for 2013 and 2014. Samaras said his party had identified savings equal to 18.4 billion euros and that he’d told international creditors there’s no room for new taxes or wage and pension cuts.

“The only thing we have to do is cut state spending,” he said. “I pledge to do everything so that spending cuts will come from the wastefulness which is everywhere.”

Samaras said that would enable him to restore pension levels for the lowest earners as well as for farmers. He said restoring those pensions and incomes would cost no more than 550 million euros and be paid for by a tax on new electronic betting games as well as spending cuts at state-owned transport companies that generate deficits of more than 1.5 billion euros a year.

‘Completely Committed’

Samaras said his party was “completely committed” to the goal of reducing the nation’s deficit and debt through state asset sales. That’s as long as the economy returns to growth soon, he said.

Even after a 100 billion-euro write off of Greek bonds this year, the biggest restructuring in history, the country’s debt is forecast at 163 percent of output in 2012, according to IMF forecasts on March 16. The deficit will fall to 7.3 percent this year from 9.3 percent in 2011, while the economy is set to contract as much as 4.8 percent.

With unemployment nearing a record 22 percent, support for the two biggest parties has dwindled. The growing popularity of smaller anti-austerity parties is damaging the likelihood of Samaras or Socialist Pasok, led by former finance minister Evangelos Venizelos, from being able to push through reforms.

To contact the reporters on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net Maria Petrakis in Athens at mpetrakis@bloomberg.net

To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net Stephen Foxwell at sfoxwell@bloomberg.net


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