In terms of taxes and excessive surpluses we are doing just fine, but in terms of economic growth we constantly fall short of projections, despite the burst of optimism that has overtaken the government.
The 2018 budget that was tabled in parliament yesterday follows the same prescription as did those over the last years.
One finds 950 million euros in additional taxes and one billion euros in budget cutbacks, which aim to achieve a primary surplus of 3.8 percent of GDP, above the bailout memorandum target to which Greece agreed.
In short, the government is zealously following the well known recipe of excessive taxation to reach bailout memorandum targets, indifferent to the repercussions for the economy and households.
It is indicative that based on the data, the 2017 primary surplus is divd at 2.44 percent, and if one factors in the “social dividend”, a one-time hand-out, it reaches 3.22 percent, compared to a target of 1.75 percent…
In other words, businesses, professionals and households were literally strangled, all in order to make Mr. Tsipras appear generous.
The result is that growth is calculated at 1.6 percent of GDP, compared to a projection of 2.7 percent of the budget,
Despite the universal – including the government – observation that the taxpaying capacity of citizens has been exhausted, the prescription remains the same, unchanged.
In addition, one awaits implementation next year of a series of cutbacks already passed by parliament, including various benefits, medical expenses, and heating fuel, as well as hikes in the insurance contributions of professionals – measures that affect those categories of citizens which supposedly are being protected by the government’s distribution of the social welfare benefit.
It is an incontrovertible fact that the era of deficits and untrammeled spending is long gone.
But here we have a government policy that surpasses the already high targets in the bailout memorandum that it signed.
Although not so long ago the current ruling party was depicting high primary surpluses as a disaster for the economy, it now has not only accepted them, but it insists on even higher targets, dramatically limiting the liquidity of the economy and the available income of citizens.
This prescription has its limits, and they been surpassed long ago. This is proven by the five to six billion euro drop in declared income last year, which resulted in a corresponding cut in tax revenues. This pattern will likely continue in the coming year.
The leveling of the middle class, which was the most dynamic part of society and the economy, cannot but have broader consequences, which not only are not tempered by the budget that was tabled, but instead are further aggravated.
All this is occurring in order to allow the government to be able to portray the good student of creditors, and to distribute a few benefits in the end as …a consolation prize.
