“It does not mean that you reduce VAT and automatically reduce prices on products, or that you reduce the Excise Tax on fuel and automatically reduce prices on fuel. This has never been the case to date,” said Minister of Development and Investment Adonis Georgiadis. , speaking in the First Program regarding the increase of inflation.
“If we have a reduction in VAT on a number of products, it is certain that the reduction will not go to the final prices. The horizontal reduction of taxes as a result of the final prices on the shelf is relatively important,” said the minister, citing the reduction VAT on catering from 23% to 13%, wondering if then the products were automatically reduced by 10 points. “Of course not,” he said, adding that when VAT rose from 13% to 23%, prices rose by 10 points. their customers, or at an easier time to try to make up for their loss, “he explained.
According to him, the horizontal measures, which have high fiscal costs, are not going to help people because prices are not going to fall, while they will put the economy at great risk, because rising inflation is putting pressure on central banks to raise interest rates and this in turn automatically creates a new increase in countries’ lending rates. “Greece, because it is the country with the largest public debt, already has higher interest rates compared to others. So going to trigger an increase in interest rates on your bonds yourself, which will soon turn into an increase “Interest rates on mortgages – mortgages, business cards, etc. – is it wise? That is, to tell someone you will save an X amount of gasoline and pay it 3X on your card, or on your loan?”, he wondered. .
He fired shots at the official opposition, saying that some “suggest some easy measures, like Mr. Tsipras, who said that if SYRIZA were a government, the electricity tariffs would freeze”. “That is, forgive me, for God’s sake. He has been prime minister for 5 years. Greece is a country that imports energy. If you are going to freeze tariffs, what will really happen? Can you force a company, PPC or other providers, to “Do you sell electricity at a loss every day? Can you imagine the state going and saying I owe it to all energy companies to go bankrupt? Am I going crazy just hearing it?”
Asked how the government will deal with the situation, Mr. Georgiadis said that “we are planning a policy that says” I measure my public finances to see what I really have left over without endangering the long-term course of the country and I make some policies. “targeting those of our fellow citizens whose indecent inflationary pressures are creating suffocating pressures in their lives.” But we are not all people in the same bucket. ”
“We know who the vulnerable are. Those below the poverty line. Announcements will be made when the financial staff is ready. We recognize the problem and work to find a solution. What I do not accept is easy opposition from people who have found it again.” “money trees” and have easy solutions. There are no easy solutions to this global inflation crisis, “he said.
The problem of inflation is global
The Minister stressed that accuracy is not only observed in us. “The EU has the highest inflation since the founding of the Eurozone, the US the highest inflation in 40 years, Germany the highest inflation since World War II. There are many theories and debates about what caused the pandemic “An explosion of global inflation,” he said.
“Our inflation in January -6.4% on an annual basis- is the highest since 1997. Very high. It does not happen only to us. But what people do not see is that on a monthly basis, ie from December to January , Greece is one of the few countries that had a decline in inflation, minus 0.3% The large number of 6.4% is estimated in January 2021, when we had the highest inflation rate in our history, minus 2.4 So, starting from a minus 2.4%, compared to an inflation season, inflation increases a lot, so if you compare what you paid last January with January this year in the supermarket, the difference is very big. “It’s not straightforward if you compare last January with last year, you were very low and deflation is hurting the economy and business. It means a lot of people are selling at a loss. Like inflation, it’s hurting.” ref He added: “On the contrary, that we manage to have on a monthly basis even a small drop – and watch out for the month we had the energy boom due to Ukraine – that means that except for energy, the rest of the market tried – I do not say that he succeeded, but tried to gather himself. ”
He added: “If we were in January 2021 you would see farmers in my office asking for financial support because the prices they were selling at a loss were so low. The prices could not and should not remain where they were last January.”
Regarding the government’s market strategy, he said that it does not change “because it is successful” and that is why “we remain in the countries with the lowest inflation in Europe”.
He stressed that there are continuous inspections. “Yesterday, the Competition Commission re-entered the supermarket and wholesale chains to check the cartel case. We from the Ministry of Development check every day. We also have institutional tools, such as the profit margin, to avoid an additional speculation. “Some on this global problem. I think we control it very much,” he said.
He reiterated that because we have an economy interconnected with other economies. As he noted: “Since we have imported raw materials, imported energy, imported goods, it is impossible for us not to have inflation since everyone else has it. It would be something supernatural, it can not happen. So under “In this sense, unfortunately, we will also have a period of inflationary pressures. Now, if the Commission ‘s estimates are confirmed, these inflationary pressures will begin to subside by the middle of the year. It remains to be seen.”
“We will not blow up the ‘bank’ in the air”
Asked about possible benefits in view of elections whenever they take place, Mr. Georgiadis stressed that “there is no case for this government, for pre-election reasons, to jeopardize the long-term course of the country. I say it and I sign it”. “We will not shake the ‘bank’ in the air,” he said characteristically.
On the contrary, he said, “in the elections we will go honestly to the Greek people and ask for a fair judgment for what we have done these 4 years – they will be done in the end” and added: “We will neither go to fool nor cheat. have brought Greece into crisis, we have come to make people’s lives better, not worse. “After the decade 2010-2020, a step has been found before the acquisition of an investment grade which means that it is returning to normal.”
“It is never possible for the government to risk 10 years of sacrifice for ‘political’ reasons,” he said, adding that this was unlikely to happen.
Source: AMPE
Source: Capital
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