Mitsotakis: VAT reduction, job support, liquidity measures to mitigate Covid-19 fallout

The government’s plan for the economic repercussions of the coronavirus epidemic will focus on retaining jobs, reducing taxes and supporting businesses, Prime Minister Kyriakos Mitsotakis said during a televised address on Wednesday.
“The pandemic interrupted the country’s impetus at a time when it was entering a phase of growth,” Mitsotakis said, noting that the measures to be detailed by ministers following his announcement will provide a bridge to the next phase, in order to lead to growth again in 2021.
Through a program called Syn-ergasia to help employees keep their jobs, he said, businesses that have been hardest hit will be allowed to reduce work shifts without laying off staff in order to get back on their feet again. Staff’s salaries and insurance payments will not change, he asserted. The program will be funded with 1 billion euros by the EU’s Support to mitigate Unemployment Risks in an Emergency (SURE), with additional EU funds.
“I had the dilemma of ‘unemployment check’ or ‘supporting employment,” Mitsotakis said, “and I chose the latter.” He also added that all unemployment benefits would be extended.
In terms of taxation, VAT in mass transportation would be reduced from the current 24 pct to 13 pct, in order to allow Greeks to holiday this summer. Additional programs for those who come from financially distressed parts of society will be announced at a later date, he added.
VAT for coffee, non-alcoholic beverages and summer theaters will also be reduced in a similar manner, while additional taxation relief measures include an extension of the 40% discount of rentals, and ‘a significant reduction’ in pre-paid tax for businesses and individuals. The premier cautioned that the tax reduction in consumables was temporary, not permanent.
To help businesses, Mitsotakis said, the “returnable advance” financial instrument to boost corporate liquidity would also be extended through May and to more businesses, with the government guaranteeing up to 80 pct of bank loans. Deadlines of loan repayments will also be extended, he said.
All interventions will total 24 billion euros, the prime minister said.
The tourist season will officially open on June 15, he said, while direct flights from abroad to Greece will be allowed as of July 1.
The Greek people, through their perseverance of the health crisis and their observation of directions turned Greece into a model country, Mitsotakis noted, and said continued discipline, adaptability and solidarity would carry the country through the economic difficulties created by the pandemic and into growth in 2021.