An­other warn­ing for the gov’t

Par­lia­ment’s Bud­get Of­fice says the econ­omy will not re­cover by it­self and asks for ac­tion on many fronts

Kathimerini English - - Focus -

In its an­nu­al­re­port de­liv­ered to House Speaker Nikos Vout­sis yes­ter­day, the Par­lia­men­tary Bud­get Of­fice is­sued a clear warn­ing to the gov­ern­ment that the econ­omy needs its help if it is to re­cover.

“Un­less un­cer­tainty re­gard­ing the course of fu­ture pol­icy is elim­i­nated and the gov­er­nance rules change, the econ­omy will not re­cover,” the re­port states.

It also at­tributes great sig­nif­i­cance to the im­ple­men­ta­tion of es­sen­tial re­forms, high­light­ing that 2017 has be­gun “with new de­lays in the ap­pli­ca­tion of the pro­gram,” point­ing to an­other dif­fi­cult year ahead.

On the re­forms in the pro­gram, the Bud­get Of­fice economists es­ti­mate that “they lay the foun­da­tions for avert­ing the con­sol­i­da­tion of a sit­u­a­tion dom­i­nated by an in­creas­ing bur­den on the pri­vate sec­tor, a re­duc­tion of in­comes in the pub­lic sec­tor, lim­ited cap­i­tal flows, the ex­o­dus of ed­u­cated young peo­ple and mal­func­tion­ing state struc­tures.”

The re­port ad­dresses the is­sue of Greece’s debt by saying that “a per­ma­nent so­lu­tion for its sus­tain­abil­ity would elim­i­nate an im­por­tant fac­tor of un­cer­tainty re­gard­ing the fu­ture of the econ­omy and in­vest­ment prospects. It would also pave the way for the coun­try’s par­tic­i­pa­tion in the Euro­pean Cen­tral Bank’s quan­ti­ta­tive eas­ing pro­gram, re­duce bor­row­ing in­ter­est rates and fa­cil­i­tate [the coun­try’s] re­turn to the mar­kets.”

In terms of the so­cial se­cu­rity sys­tem, the re­port notes that “as long as the nec­es­sary re­forms are post­poned, the bill will keep grow­ing,” and that “the mar­gin for the fair dis­tri­bu­tion of the bur­den is di­min­ished.”

The Bud­get Of­fice also calls on the gov­ern­ment to con­duct an over­haul of state ex­pen­di­ture, de­mand­ing more sys­tem­atic po­lit­i­cal in­ter­ven­tions so as to save more money.

On tax­a­tion, it notes that the in- 1.0606 crease in tax rates dis­cour­ages hard work and en­trepreneur­ship and there­fore dims hopes of a re­turn to sus­tain­able growth. “The con­stant tax hikes are saw­ing at the branch of pro­duc­tion and the econ­omy,” the re­port reads.

It fur­ther refers to la­bor is­sues, ask­ing for leg­isla­tive in­ter­ven­tions re­gard­ing the process in­volved in call­ing a strike, com­pany-spe­cific col­lec­tive la­bor con­tracts and oth­ers.

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