Έχουμε το πρώτο βήμα στην κατεύθυνση της καταβολής συντάξεων με βάση το σύνολο των εισοδημάτων?

Έχουμε την πρώτη διαφοροποίηση στη μεταχείριση φορολογικών υποχρεώσεων με βάση το σύνολο των εισοδημάτων κι αυτο θα επηρεασει και τον τροπο καταβολή συντάξεων στο μέλλον ? Εκτιμώ πως ναι

Πιο συγκεκριμένα, χάνουν την έκπτωση 50% στον ΕΝΦΙΑ, οι ιδιοκτήτες ακινήτων που έχουν εισοδήματα από τόκους 300 ευρώ, δηλαδή έχουν καταθέσεις άνω των 35.000- 38.000 ευρώ. Κι επειδή το ελληνικό ασφαλιστικό σύστημα είναι αναδιανεμητικό (όπως η φορολογία) κι όχι ανακεφαλαιοποιητικό (πλέον οι συντάξεις δεν πληρώνονται μόνο από τις εισφορές ή την απόδοση των επενδύσεων των ταμείων), κατά τη γνώμη μου αυτό το μέτρο αποτελεί το πρώτο βήμα για την καταβολή συντάξεων σε συνάρτηση με το συνολικό εισόδημα του συνταξιούχου (σύστημα Αυστραλίας, Νέας Ζηλανδίας).

Κι αυτό γιατί έχουμε 3 εκατ. συνταξιούχους (2,7 + 0,3 σε αναμονή) για 3,7 εκατ. εργαζόμενους. Εάν προσθέσεις την αλλοπρόσαλλη και αντιεπενδυτική πολιτική της κυβέρνησης ΣΥΡΙΖΑ ΑΝεξΕλ, γίνεται κατανοητό ότι ο λογαριασμός δεν θα θα βγει...

Για την ιστορία, απαλλαγή από το 50% του ΕΝΦΙΑ έχει κάθε φορολογούμενος που πληροί τις εξής προϋποθέσεις:
– Το «συνολικό ετήσιο καθαρό οικογενειακό εισόδημα» του προηγούμενου έτους δεν έχει υπερβεί τις 9.000 ευρώ, προσαυξημένο κατά 1.000 ευρώ για τον ή τη σύζυγο και για κάθε εξαρτώμενο μέλος της οικογένειας.
– Το σύνολο της επιφάνειας των κτισμάτων τα οποία κατέχει ο φορολογούμενος και τα λοιπά μέλη της οικογένειάς του δεν υπερέβαινε τα 150 τετραγωνικά μέτρα.  

3rd Nov, 2015 Greece needs to run fast to integrate NEETs to job market (NEETs - Not in Education, Employment, or Training)

·         EU’s Finance Commissioner Moscovici arrives in Athens today.  Greece’s government is planning to submit the next omnibus bill in local Commons, by this Thursday.

·         Following the 'better than expected' results of stress tests, the Greek Banks rallied yesterday, helping to an increase of trading volume (45 mios) and index (3.08%). More specifically, the Eurobank and Alpha closed at +29% followed by National (+18%) and Piraeus (+7.6%). Attica Bank which is a no-systemic small bank owned by TSMEDE (pension fund of engineers), rejected commentaries which suggest that there will be a split between ‘good bank’ and bad bank’.

·         According to UN Refugees Agency, almost all refugees who entered EU in October came through Greek islands. More specifically,  in an effort to reach central/western Europe, approx. 210,000 out of a total of 218,000 refugees who entered in EU in October,  passed from Turkey through Aegean Sea, and landed to Greek islands (mainly the island of Lesvos).

·         According to Hellenic Association of Tourism Enterprises’ Andreadis, the early bookings from UK, show an increase of +6% vs. those of last year.  

·         According to European Central Bank, Greece may face an increase in unemployment, up to the level of 28.1%, in 2016. Greece has the highest rate of unemployment (25%) and long-term unemployment (73.1%) among the 28 EU countries. In addition, more than half of Greeks (52.4%) aged 15-24 are out of job which is tripled compared to OECD average.

·         According to Social Inclusion Monitor Europe, Greece gets the lowest score among the 28 countries of EU, as regards Social Justice Index. This is due to low score in poverty prevention, equal opportunities to education, access to job market, social inclusion without discrimination, health and inter-generation justice. According to Bergelsmann institute approx. 36% of Greek population faces the threat of poverty and social exclusion; the situation has significantly deteriorated during the last 6 years due to debt crisis and disinvestment. He added that ‘the target is the shielding of the competitiveness of the Greek tourism product, which must overcome a series of direct challenges such over-taxation, illegal accommodation, boosting investor interest and corporate liquidity’. 

Risk assessment. Greece gradually returns to normality and reality. Up to now, Greece's government ratifies the frontloading 3^rd MoU, with emphasis on the recapitalisation of Greek Banks, pension cuts and taxation of those sectors which were not taxed in equal terms with the rest of local economy. 

However, it becomes absolutely necessary to see relaxation of taxation concerning a) this part of economy which couldn’t tax evade such as employees, b) entrepreneurship which will generate jobs and c) real estate which impacts several professions and can assist on repayments of loans and citizens’ debt to the Greek state.

More specifically, local government needs to start from abolishing all hidden costs which are called ‘isfores yper triton’ which concern contributions of citizens and businesses to pension funds of local elites. In addition, it needs to adjust or even abolish the so called ‘efapax’ (lump sum money) which is paid to new pensioners to those pension funds which are heavily subsidised by state budget.

 

In any case, Greece needs to implement a fair, transparent and stable tax system, in order to attract foreign investments with long term time horizon, which reduce unemployment. 

It also needs to invest in education in order to reduce the skills mismatch. The vast majority of local universities is not linked to market and still generate graduates of anachronistic and/or irrelevant skills and background. 

 

Last but not least, according to institute Bertelsmann 28.4% of Greece’s young populationaged 20-24 in 2014, were included in NEETs category (Not in Education,Employment, or Training). This doesn’t only represent a significant social and economic problem but a time bomb for Greece’s existence as well.

 

27th Oct, 2015, Greece may face a similar to 1922 refugees’ crisis amid critical economic challenges

• According to International Organization for Migration, approximately 48,000 refugees arrived in Greek islands within 5 days (up to October 21^st). Greece’s Tsipras agreed on EU’s plan to increase Greece’s capacity to 50,000 refugees by end 2015.

• According to Spiegel, there was an initial proposal to Greek government concerning the creation of a mega-camp of 50,000 refugees at Athens’ Olympic campus. However, eventually there was an agreement that Greece will increase its capacity up to 50,000 refugees by end 2015, and EU will subsidy the rent for 20,000 refugees.

• There is still a disagreement as regards the reimbursement of 2 bios euros by end October. Press linkages suggest that this will occur in November and after the completion of banks’ recapitalisation. In addition, Greece needs to meet its December’s obligations to IMF, which amount 1.2 bios euros.

• Greece’s government published the ministerial decree regarding the implementation of a law which was voted in August, concerning the gradual decree of age of retirement to 62 years with 40 years of insurance contribution or 67 years with fewer years of contributions.

• According to Greek government’s spokeswoman Gerovassili, there is still a 700 mios euros shortfall for pensions for 2015 and 2016. Although the Greek government insists that there will be cuts in pensions about the threshold of 1,000 euros, there are many publications which refer to pension cuts below this threshold. In addition, the Greek government brought to the table of negotiations, the further increase of employers’ contributions.

• ECB will announced the results of Greek Banks’ stress tests this Saturday October 31^st, at 11.30 am Athens time. This increases the pressure to the Greek government to submit the recapitalisation bill by Friday. As a reminder, this bill should have been ratified by mid –October. A number of reports have been published which estimate that the Greek Banks will need approximately 5-7 bios injection of private funds.

• According to various banks’ analysts, the total number will reach the level of 15 bios which could be reduced below the level of 10 bios euros, if banks implement their restructuring plans.

• According to Hellenic Asset Development Fund’s Pitsiorlas, the SYRIZA’s government will push ahead its ambitious privatisation plan which amounts 3.5 bios euros in 2016. At the moment, there are major two projects, which concern a) the privatisation of 14 regional airports to Fraport and b) Port of Piraeus which could be completed by year-end.    

Risk assessment. I remain on my previous estimates that the impact of capital controls will be less than it was initially expected,  and this will facilitate the recapitalisation of Greek Banks. In addition, the probability that Tsipras won't fulfil all his commitments which are included in the 3rd MoU, remains low.

However, there is another factor which gradually plays more significant role, enhances Greece's negotiation power, geopolitical role and if it is handled effectively by the Greek Government, then it could be used as the mean for EU funds' transfer to the Greek economy, the debt's relief and return to sustainable economic trajectory. I'm referring to the ongoing refugees' crisis.

Greece’s leftist government doesn’t face only a series of critical deadlines concerning Banks’ recapitalisation and EU reimbursements to meet obligations to IMF, but also the most significant refugees’ crisis since 1922, when almost 2 million refugees from Minor Asia fled to its territory.

Although there are significant risks associated with refugees’ crisis, if Greek government manage the situation in a constructive way and integrate those refugees in its social net there will be benefits to local economy and society.

In addition, there will be a need for additional workforce when local economy will return to growth trajectory. The question is ‘how this need for labour force is justified by the current high unemployment rate of 25%?’

The main reason is that Greece faces significant demographic crisis, which has not only impacted economic activity but has almost derailed its pension system. This crisis was further deteriorated  due to the ongoing crisis which forced thousands of Greeks to relocate to other EU countries. This relocation was partially due to economic cycle and partially due to skill mismatch. For instance,  according to World Health Organization, Greece holds the second position globally as regards the number of doctors per 10,000 citizens (62 out of 10,000 when it is 35 at EU level). And this contributed to the overall bubble of local economy which busted in 2009.  

Needless to say that structural problems of local educational system combined with cultural problems, unlimited access to borrowing money and black economy resulted to the creation of a scientific ‘proletariat’.

Last but not least, it is highly unlikely that refugees’ inclusion to local social net, will be handled by local state structures. Considering the ongoing restructuring of state sector, it will be extremely difficult to Greece’s state sector to handle such extremely high burden, which is not only associated to capacity issues but to cultural issues as well. It is highly likely that international organisations will be highly involved in matters related to refugees as it happened in 1922 national disaster.

25th Oct, 2015, Greece’s technical dramatization of negotiations intensifies, amid gradual restoration of interest for investments

• It appears that there is a disagreement between Greek government and creditors as regards the implementation of measures which are included in the 3^rd MoU. More specifically, there are obstacles on taxation of private education and foreclosures’ threshold. This prevents not only the disbursement of 2 bios euros but the Greek Banks' recapitalisation as well.  

• During his visit in Athens, France’s Hollande reconfirmed his previous position that in case Greece fulfils its obligations which are included in the 3^rd MoU, there should be an agreement as regards Greece’s debt relief. He also added that there should be more discussion as regards the threshold for foreclosures.

• Greece’s current account surplus in August closed at 2.1 bios euros which is 0.232 bios euros higher compared to August 2014. This was due to the reduction of imports by -14.7% and an increase of revenues from tourism by +7.3%. However, the value of exports decreased by -12.8% (due to oil prices’ drop).

• The number of unemployed Greeks who are seeking employment reduced to 806,429 in September 2015, compared to 815,434 in August 2015 and 823,618 in September 2014. This slight improvement is related to growth in tourism. However, the part of unemployed which remains out of local marketplace for more than 12 months is 456,329 (56.59%).

• According to the recent report of 'Review of Maritime Transport', the Greek shipping industry maintained its 1^st position globally as regards a) total capacity of ships bigger than 1,000 tonnes and b) number of ships. In addition, the Greek ship-owners increased their market share as regards global shipping cargo to 16.1% (compared to 15.4% in 2014). Last but not least, the Greek shipping industry transports approx. 50% of total EU’s shipping trade.

• The Coca Cola Hellenic which represents Coca Cola’s no2 franchise at global level, announced that OTE (Deutsche Telecoms’ Greek subsidiary) gained the contract to run its datacentre for the next 5 years. In addition, Cocal Cola will transfer its primary data centre from Switcherland to Greece.

• Renting prices for shops in Greece, are the lowest at European level (even lower than Romania and Bulgaria).  According to data published by the Bank of Greece, the total decrease of renting prices reached the level of 31% during the period 2009-14.

• Bulgaria’s surplus of current account increased by +23.7% (on an annual basis) during the period Jan-Aug 2015. This was mainly a result of a reduction in trade balance’s deficit (exports increased by +9.1% and imports by +3.7%)  

Risk assessment. Tsipras’ government attempts to return to his drama-style negotiations with creditors. However, I remain on my previous view that the impact of capital controls to local economy will be less than it was initially expected. Gradually, this becomes the view of many international economic bodies and EU Commission, which are now evaluating the reduction of local GDP to less than -1.5% (from -2.5% which was the initial estimate).

It becomes evident that the better-than-expected Greece’s economic performance will impact positively the base scenario of stress tests and eventually the recapitalisation Greek Banks’ which appears to evolve comparatively smoothly. In addition, the interest of private sector on the recapitalisation of Greek Banks will be assisted by

a) the current rate differential between Greek bonds' yield and bonds of other Eurozone countries,

b) the potential for upside, if Greece implements the changes which are included in 3rd MoU

c) the gradual increase of Greece's geopolitical role due to the on-going fluid geopolitical situation in Middle East and

d) the significant increase of competitiveness during the last 6 years. 

Although, local media are conquered by news related to a disagreement on taxation of private education and foreclosures, the most complicated item remains the restructuring of local pension system. However, the possibility that SYRIZA’s government won’t fulfil its commitments is low, considering a) Tsipras has agreed on this item b) pension system' burden is unsustainable and  impacts significantly economy and c) the implementation of pending structural reforms impacts directly the recapitalisation of Greek Banks which needs to be completed by end 2015.

Although there is a need of taxing certain parts of Greek economy which traditionally didn’t contribute to state revenues, it is absolutely necessary to reduce the overall non-salary cost to local enterprises, hidden taxes to overall economy/society and  current taxation to entrepreneurship, pensioners and employees.

Last but not least, the significant increase of citizens and enterprises’ debt to the Greek state by 1.5 bios show that further increases of taxation on the current taxpayers, will only increase private debt and won’t bring additional revenues. 

The fact that 95% of state budget is related to the increase of revenues, compared decrease of expenditure, shows that these SYRIZA’s government policies won’t succeed, and there will a shift to realism soon. This means that sooner rather than later, there will be a significant reduction of state expenditure, starting from pension system which represents its biggest and most unsustainable item.

   

21st Oct, 2015, Run Tsipras!… Run!

·         Greece’s discussions with creditors as regards the disbursement of 2 bios euros continue. It has been announced that today’s Euroworking Group has been cancelled because the Greek government has ratified only 1/3 of the 49 prerequisite measures which have agreed with creditors.

 

·         Greece’s banking sector index rallied by 5.5% on Tuesday due to press linkages indicating that there has been an agreement between government and creditors as regards the legislation related to banks' recapitalisation. Needless to say that volume remains at extremely low levels and fluctuates between 20-50 mios on a daily basis, due to capital controls.  

·         Greece's country risk gradually improves. More specifically, 2 yr. bonds’ yield has dropped to 8.2%; it was close to 58% on 10^th July. In addition, 10 yr. bonds’ yield has dropped below 8.0%, fluctuates at 7.8%; it was close to 20% on 10^th July

·         It appears there has been a progress between Greece and US as regards a joint venture aiming in creating an energy hub in northern Greece.  As it has been described in previous commentaries, the project refers initially to the creation of an LNG terminal in Alexandroupolis, which will transfer natural gas to Bulgaria and other central European countries through IGB pipeline. The energy plan is also included among EU priority energy-related projects.

·         The head of 'independent' secretariat of public revenues’ Savvidou defended her position publicly as regards a legal case, which is under investigation by local economic prosecutor. She also refused to resign from her post and expressed her intention to bring the case to justice system in order to defend her integrity.

·         There has been a significant increase of real estate purchases by non EU citizens during the last four months. These purchases are related to the program, which awards residence permits to non-European Union citizens who buy real estate in Greece. Although there have been only 983 purchases of Greek property since 2013, it appears that there has been an increase of 28.5% (on an annual basis) during the last four months. Chinese buyers come first with 335 purchases/permits, and Russians follow with 315 permits. It seems that the interest from Middle East or Ukraine is gradually catching up.

·         According to Greece’s Finance Ministry tax debt increased by 1.5 bios euros in September due to inability of taxpayers to repay their obligations. This increases the YTD budget risk to the level of 5 bios on revenues side.

·         According to the Office of Economic and Commercial Affairs of Romania, Greek-origin investments have reached the amount of 4 bios euros. Greek exports to Romania increased by 17.74% during the first half of 2015, while Greek imports from Romania increased by 4.27%.

Risk assessment. It appears that revenues hysteresis to Greek citizens, who are not able to tax evade has started to impact significantly state revenues. The increase of citizens’ debt by 1.5 bios in September should ring the bell to Greece’s leftist government which favours the increase of tax revenues compared to reduction of expenses.

Tsipras needs to run fast and implement the 33 pending actions in order to achieve not only the reimbursement of 2 bios euros but also the recapitalisation of Greek Banks. The latter is absolutely necessary to be completed within November in order to prevent a potential bail-in in 2016.

However, the Greek government consumes valuable time to an endless discussion regarding ‘equivalent measures’, which will never be found. Although it is fair to expand the existing tax base and include certain parts of economy (black economy, farmers, islands) which traditionally don’t contribute to state revenues as part of clientelism, the majority of Greek taxpayers (employees, pensioners, entrepreneurship etc) need relaxation of tax burden.

As it has been stated before, the reduction of pension system’s expenditure, in fair terms, appears as the only way to reduce tax burden, which will also allow local economy to grow. Actually, the bottom line of the new, additional taxation on existing pensions is translated to pensions’ cuts, anyway.