Business favours government change in Greece – elections to be held on 07 July

Business favours government change in Greece – elections to be held on 07 July

The new elections in Greece, is scheduled to be on the 7th July 2019, after Greek President, Mr. Prokopis Pavlopoulos, approved the Prime Minister’s, Mr. Alexis Tsipras’s, call for a snap election (https://www.aljazeera.com/news/europe/2019/06/greek-president-approves-tsipras-call-july-7-snap-election-190610163019229.html).

According to the polls, as the campaign kicked off on Tuesday, 11th June 2019, “Syriza”, governing party of the Radical Left, fell behind “New Democracy”, the centre-right main opposition party, led by Mr. Kyriakos Mitsotakis, by approximately 9.5 percentage points (https://www.ft.com/content/8b0eba4e-8c59-11e9-a1c1-51bf8f989972?desktop=true).

Data indicates that business is in favour of a change of government, which is exemplified in various forms.

Greece’s stock market rose sharply, immediately following victory of the New Democracy and the defeat of the ruling left in the Regional and Euroelections, on Sunday 26th May 2019 (https://www.forbes.com/sites/panosmourdoukoutas/2019/06/01/greek-stocks-on-fire-as-the-leftist-bubble-is-beginning-to-burst/#e5ad5943f6d8).

Mr. Socrates Lazaridis, Athen’s Exchange Chief Executive Officer, declared that he expects further gains, buoyed by the likely election of opposition leader, Mr. Kyriakos Mitsotakis in July’s snap vote. The Greek shares have rallied about 38% this year in local terms, which is more than double the S&P 500 Index, and five times MSCI’s benchmark emerging-market equity gauge (https://www.bloomberg.com/news/articles/2019-06-13/greece-world-s-best-stock-market-touts-turnaround-from-crisis).

He continued to proclaim that Greece’s new government will implement more pro-business policies and accelerate an overhaul of the banking industry, as well as that Mr. Mitsotakis plans to lower corporate taxes and sell state assets as part of a plan, targeting a growth rate of 4%.

Mr. Mitsotakis has vowed to restore market credibility during his first year in office, and, in an exclusive interview, he told CNBC that he wants to bring down taxes for domestic and international businesses, in what he described as an “aggressive and comprehensive tax reform” (https://www.cnbc.com/2019/02/20/greece-opposition-leader-kyriakos-mitsotakis-on-taxes-and-economic-growth.html).

His proposal includes a plan to bring down the corporate tax to 20 percent in two years.

In addition to this, the yield on Greece’s benchmark 10-year bond fell to a record low of 2.74% on Wednesday, 12th June 2019, depicting another sign of investor confidence (https://www.bloomberg.com/news/articles/2019-06-13/greece-world-s-best-stock-market-touts-turnaround-from-crisis).

It is important to note that the New Democracy is running on a platform of tax cuts and eliminating longstanding bureaucratic obstacles to investment (https://www.ft.com/content/8b0eba4e-8c59-11e9-a1c1-51bf8f989972?desktop=true).

On the contrary, the current government has been criticised for failing to uphold to their pledge of ending Greece’s problem, a network of tight relationships between business, government and the media under previous governments, which was seen as encouraging corrupt practices and pushing away foreign investments.

Nevertheless, the Prime Minister has asked for another term, and vows to cut income tax and create half a million jobs (https://www.ft.com/content/b797dea2-4a27-11e9-bde6-79eaea5acb64) (https://www.theguardian.com/world/2019/jun/11/tsipras-asks-greek-voters-for-chance-to-govern-without-our-hands-tied).

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