Greek Prime Minister Kyriakos Mitsotakis speaks to journalists in Larissa, Greece, in the aftermath of Storm Daniel in central Greece, September 8, 2023.Reuters/Kostas Manzialis/File photo Obtaining license rights
ATHENS (Reuters) – Greek Prime Minister Kyriakos Mitsotakis on Saturday called for national reforms to boost economic growth and provide relief to people hit by natural disasters without jeopardizing the country’s fiscal progress. He said that he would promote the
His annual policy speech was overshadowed by storms that killed 17 people last week and deadly wildfires in the country’s north this month.
The conservative prime minister said the national treasury for natural disasters would be doubled to 600 million euros next year, taken from luxury hotel room taxes. Tourism has been the driving force behind Greece’s economy, which has emerged from the 2018 debt crisis.
Mitsotakis was re-elected in June. The prime minister had postponed his annual speech on economic policy by a week until September 16 due to the effects of Storm Daniel, the most powerful storm in Greece since records began in 1930.
The storm battered central Greece’s Thessaly for three days, flooding cities and villages and turning the region into an inland sea. Hundreds of residents were airlifted or pulled from flooded homes in lifeboats, crops washed away and tens of thousands of animals drowned.
In his speech in northern Thessaloniki, Mitsotakis cited the challenges Greece faces from climate change and the financial support Greece could receive from Europe. He added, however, that “the Greek economy is strong enough to withstand it.”
Mitsotakis outlined statewide reforms to improve ministry coordination, tackle tax evasion, strengthen the health sector, and support families, youth, and access to affordable housing.
He reiterated that wages in the public sector will rise, saying the minimum wage of 780 euros per month will rise again from April 2024. He also outlined employment for health care workers, paramedics and firefighters, which was one of his pre-election promises.
“My speech today contains no new arrogant favors,” Mitsotakis said. “I will never jeopardize the financial stability that is the foundation of our nation’s progress. I will never allow our nation to experience the trauma of bankruptcy.”
In the financial sector, Mitsotakis said Greece’s 0.2% financial transaction tax would be cut in half.
This month, Greece regained an investment-grade credit rating for the first time in 13 years, rather than by the three major credit rating agencies. On Friday, global credit rating agency Moody’s raised Greece’s credit rating by two notches to Ba1, one notch below investment grade.
Greece expects economic growth to slow to 2.3% this year from 5.9% in 2022, but still above the eurozone average of about 0.6%. It is expected to achieve a primary balance surplus of 1.1% this year and reach its annual target of 2 billion euros in privatization revenues.
But wildfires and floods are expected to weigh on the economy, which has only recently emerged from a decade-long debt crisis. According to a Eurobank report, economic activity in Thessaly accounts for more than 5% of GDP.
“We will make every effort to ensure that the unequal fight against the climate crisis does not become a losing battle,” Mitsotakis said, adding that Storm Daniel was a “warning” that Greece needs to be better prepared for future flooding events.
The government’s disaster response damaged its image among the public. A Metron Analysis poll released Thursday for MegaTV found that 61% of respondents had a negative opinion of the government’s efforts, compared to 57% in May.
Reporting by Renee Maltezou and Karolina Tagaris Additional reporting by Lefteris Papadimas.Editing: David Gregorio
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