Alexis Tsipras presented a concrete and detailed plan for the restart of the economy in terms of sustainability and social justice. In a special online event that lasted about 2.5 hours, the President of SYRIZA - Progressive Alliance presented the party's proposals for healing the wounds caused by the pandemic and supporting businesses and workers.
In particular, the plan of SYRIZA - Progressive Alliance includes a generous regulation in 120 instalments with a haircut as 60% of pandemic debt, liquidity measures for small and medium-sized enterprises and a new bankruptcy law with protection for first homes.
«Businesses and workers must feel secure again.Our vision is a strong economy and a strong society», the President of SYRIZA - Progressive Alliance stressed.
«If the ticking time bomb of private debt is not addressed, the consequences will be dire. The government promises lockouts and unemployment for many, half wages and businesses drowning in debt for the rest,» Alexis Tsipras said.
The three pillars of the plan
SYRIZA's plan has three pillars:
- Measures for pandemic private debt
- Measures to boost the liquidity of small and medium-sized enterprises
- A permanent holistic framework for private debt management
«All of our proposals to boost liquidity for small and medium sized enterprises are costed at €5.7 billion. The crucial factor for the restart of the economy is the people who are at its core,» Alexis Tsipras said:
«Small and medium-sized enterprises, the self-employed, freelancers, farmers. That is: The middle class. The one that was hit hardest in the pandemic.
The middle class, which during the election became a flag of opportunity, is today for Mr Mitsotakis the invisible class. Our plan, therefore, primarily concerns the middle class and the young people who are struggling for tomorrow.
Alexis Tsipras stressed that SYRIZA abolishes the extreme anti-social Bankruptcy Law of the Southwest and restores the protection of the main residence.
«We give immediate protection to the first home of the popular strata and the middle class by including them in both the extrajudicial and judicial process, while for vulnerable categories of our fellow citizens, the granting of adjustment will be accompanied by a programme of subsidies for repayment of instalments», Alexis Tsipras stressed.
Details of the plan
State of the Greek economy and the need for a reboot plan
- The pandemic and the economic policy of the government's management of the pandemic has dealt a heavy blow to the Greek economy
- The recession reached 8.21 tPt3T in 2020: the second largest post-war and third worst performance in the euro area (provisional ELSTAT data).
- Soaring public debt
- In 2020, workers in Greece suffered the third largest drop in income in Europe.
- All businesses and activities in the economy suffered a loss of 41.6 billion in 2020.
- 7 out of 10 households whose main source of income is business activity suffered a decrease in income, with an average decrease of 27.2%.
- 23% of businesses say they are very or fairly likely to close,
- in the sectors with a particular share in employment, such as catering, the share is 41.7% and trade with 34%
- The lifting of the blockade alone does not allow for a meaningful restart,
Risks:
- winding-up of small and medium-sized enterprises
- a generalised wave of redundancies or deterioration of labour relations
- exclusion of large active parts of Greek society from economic activity
- impoverishment
- explosion of inequalities
- Need for a concrete and coherent plan
- healing the wounds left by the pandemic
- support for the actors of the real economy
- restarting the real economy in terms of sustainability and social justice.
SYRIZA proposal - 3 Pillars
1. Measures for pandemic private debt
α. Debts to the State
β. Debts to the Banks
1. Measures to enhance the liquidity of small and medium-sized enterprises
2. A permanent holistic framework for private debt management
PILLAR 1: MEASURES FOR THE PUBLIC DEBT OF THE PUBLIC DUTY
A new generation of private debt: From the beginning of the pandemic to the end of 2020:
- €7 billion in new overdue debts to the state and social security funds
- €10 billion to banks
1.Debts to the State
Debts to be settled:
Debts to the state and social security funds that were due or became due during the period of the pandemic, i.e. from 1 March 2020 to 31 August 2021.
Beneficiaries:
(a) natural persons with loss of income or loss of employment during the pandemic period
(b) enterprises belonging to the affected sectors, subject to the condition that the jobs and employment relationships are maintained for at least 1 year
Content of the setting:
(a) full remission of interest and surcharges
(b) cancellation of part of the principal debt, for certain categories of debt
(c) repayment of the remaining debt in up to 120 instalments
Basic debt haircut for the following categories of debt:
- Income tax
- Business tax
- ENFIA
- Insurance contributions for self-employed and self-employed persons
- Solidarity contribution.
Criterion for the haircut rate:
- Households: rate of income loss
- Enterprises: rate of decrease in turnover
Specifically:
- Reduction of income/turnover 10%-29% : reduction of the basic debt by 40%
- Reduction of income/turnover 30%-40%: reduction of the basic debt by 50%
- Reduction of income/turnover above 40%: reduction of the basic debt by 60%
2. Debts to the Banks
Proposed arrangements for the duration of the emergency:
- Suspension of payments.
- Grace period for settled debts.
- Extension of the repayment period with interest rate adjustment.
- Separation of debts into serviceable and non-serviceable (with regulation of the first part and freezing of the second).
- Forgiveness of part of the debt for vulnerable and affected people.
The state must legislate:
- the write-off of all default interest that may have been calculated during the critical period.
- the suspension of bankruptcy and enforcement measures
- the freeze on interest payments
- no loss of arrangements
PILLAR 2: MEASURES TO ENHANCE THE SECURITY OF SMALL BUSINESSES
1. Coverage of part of business cheques/purchases through state lending / temporary measure
State loan scheme for small and micro enterprises
Aid intensity: 30% of the cost of supplies the undertakings had in 2019
Repayment: From 2023 and up to 5 years
2. Subsidy of social security contributions to maintain jobs / temporary measure
Subsidy: total insurance contributions (employee and employer)
Duration: 6 months
- an obligation to retain all its employees for a further 6 months after the end of the subsidy, without any change in their employment relationships.
3. Conversion of the entire refundable advance into non-refundable
4. Strengthening the liquidity of enterprises through the Development Bank and bank lending / temporary measure
Guarantee scheme with a high public coverage rate of up to 90% of each loan (with no maximum coverage rate limit).
5. Special unseizable account for businesses and self-employed persons / permanent measure
6. Activation of microfinance institution / permanent measure
7. Settlement of debts to public utilities and local authorities/ temporary measure
Facilitate the payment of overdue debts to public utilities and local authorities in at least 24 instalments.
8. Business tax / temporary measure
Deletion of the business tax on the basis of the months of suspension of the business
9. Reduction of catering VAT on 6%
Pillar 3: A UNIQUE Holistic Framework for the Management of Private Debt
- repeal of the new Bankruptcy Law
- restoring protection for the main residence
- the binding nature of the arrangements for creditors and in particular for the Banks
Business
- includes debts to institutional creditors (State, Social Security, Banks)
- the opening of proceedings does not require the acceptance of the creditors
- the arrangement through an electronic platform
- the procedure includes
(a) for simple cases (traders and small businesses), automated and binding arrangements
(b) for the most complex cases (large companies with complex debts), negotiation between creditors and debtor, with predefined rules, for viable arrangements
Households
Simplified procedure through an online platform, with binding regulation for creditors and the possibility of recourse to court under certain conditions.
Protection of the first home
Immediate protection of the first home through both the extrajudicial and judicial procedure.
State subsidy: For vulnerable categories-> instalment repayment subsidy
Special provision for farmers
- full inclusion in the regulation of agricultural debts held by special liquidators (formerly Agrotiki)
- specific protection of productive assets necessary for their livelihood
Who spoke at the event
The president of SYRIZA - P.S. at the event-discussion entitled «Economy - Growth - Social Cohesion - The Road to a New Start» held a debate with:
- Dimitris Avgitidis, Professor of Commercial Law at the Faculty of Law of the Aristotle University of Thessaloniki
- Emilio Avguleas, Professor of International Banking Law and Finance at the University of Edinburgh
- Luca Katseli, professor emeritus of the University of Athens, former minister of
- George Kavvatas, president of the General Confederation of Greek Trade Unions
- Konstantinos Michalos, President of the Central Union of Chambers and the Chamber of Commerce and Industry, and
- John Hadjitheodosiou, president of the Athens Professional Chamber.
Below is the detailed introductory statement of Alexis Tsipras
