High tax rates are a danger to economic activity in the country, Yannis Stournaras, the Bank of Greece’s governor said on Tuesday.
In a speech at the Greek Shipowners’ Union, the central banker said that, despite positive estimates over the country’s economic outlook, there are still risks that must be resolved, such as the larger-than-expected negative impact of high tax rates on economic activity, and uncertainty over funding conditions of the Greek state after completion of the current bailout programme.
The central banker said that a positive economic trend could improve further because of an expected loosening of capital controls and higher international shipping freight rates.
He added that a voluntary contribution of the shipping community to state coffers covered a five-year period (2014-2018) with additional revenues for 2018 estimated at 107 million euros.
Stournaras said that Greek authorities must promptly complete a fourth (and last) review of the current programme to allow Greece to tap international capital markets on sustainable terms after the end of the current programme in August 2018 and to significantly improve the country’s credit rating.
He added that the country’s European partners, beyond specifying medium-term debt relief measures, must also clarify the support to be offered to the Greek economy after the completion of the current programme.