ATHENS (REUTERS) – Greece will submit a 2020 budget later this year that will fully respect the fiscal targets agreed with its lenders, newly elected Prime Minister Kyriakos Mitsotakis said on Saturday (July 20).

Outlining his main policies after a landslide victory in a July 7 election, Mitsotakis told Greek lawmakers that the budget would not put fiscal targets for 2019 and 2020 at risk.

Greece emerged from economic adjustment programmes overseen by its lenders last August but still needs to meet fiscal targets, including a primary budget surplus – which excludes interest payments on its debt – of 3.5 percent of annual economic output up to 2022, which many consider unrealistic.

“In the draft budget for 2020, the given fiscal balance is not disrupted and the primary surplus targets for the years 2019 and 2020, agreed by the previous government, are not disputed,” Mitsotakis said.

Mitsotakis, who takes over from for mer leftist prime minister Alexis Tsipras, was elected on a pledge to cut taxes and speed up investments to spur growth in a country which lost a quarter of its output during the Greek debt crisis.

He said that planned tax cuts and bold reforms of the economy and public administration would lead to higher growth and help Greece convince its lenders to lower fiscal targets after 2020.

“In 2020… we will have the ability to seek the lowering of primary surpluses to more realistic levels,” Mitsotakis said.

Corporate tax will be cut to 24 per cent on 2019 profit from 2 per cent currently and taxation on dividends will be halved to 5 per cent, he said, adding that a highly unpopular property tax that was introduced in 2012 at the height of the crisis will be cut by an average 22 per cent this year.

One urgent matter facing Mitsotakis’ Cabinet is the shoring up of key state-controlled utility Public Power Corp. (PPC), which is saddled with more than €2.4 billion (S$3.6 billion) of arrears from bills left unpaid during the debt crisis.

Mitsotakis said that PPC, which is 51 per cent owned by the state, would be revamped through the privatisation of its networks and identification of habitual defaulters, before a strategic investor is sought for the utility.

The new conservative government, which investors consider to be more market friendly than its predecessor, also plans to relaunch the sale of Helleneic Petroleum, the country’s biggest oil refiner, and push ahead with a €8 billion investment plan for the disused Hellenikon airport which has been beset by years of delays, Mitsotakis said.

“Hellenikon will soon become the symbol of a new Greece of… extroversion and innovation,” he said.

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