Greece Fiscal Policies

 Greece is trying to help increase aggregate demand, the government was discussing cutting taxes for businesses. Another item discussed was increasing social spending. Social spending is government funds going to help the population with things such as living conditions, health insurance, etc. This was presented from the government as well. Both of these items are thinking of being implemented because Greece recently started to recover from a decade long debt crisis which happened due to too much government spending. The cutting of taxes for businesses will spur more investments from companies which will increase productivity and help lower unemployment rates in Greece. Which are two large reasons that they had a large economic recession in past years. From 2018-2021 their government debt has increased by 35,000 EUR million. It would make sense for the government to raise taxes instead, however this large increase in debt is probably slowing down Greece's economy and on top of recovering from a debt crisis, they are probably still trying to stimulate economic growth within the country. This is probably why they are discussing cutting corporate taxes and putting more money to social spending. This will increase AD which can increase national income, economic growth and decrease unemployment. Which will be very helpful to get the economy back on track after COVID and their debt crisis.


Sources

Papadimas, Lefteris. “Greece Aims for Strong Economic Growth, Tax Cuts in 2020.” Reuters, Thomson Reuters, 7 Oct. 2019, www.reuters.com/article/us-greece-economy-budget/greece-aims-for-strong-economic-growth-tax-cuts-in-2020-idUSKBN1WM15M.

York, Erica. “The Benefits of Cutting the Corporate Income Tax Rate.” Tax Foundation, 30 July 2020, taxfoundation.org/benefits-of-a-corporate-tax-cut/.

“Greece Central Government Debt2005-2021 Data: 2022-2023 Forecast: Historical.” Greece Central Government Debt | 2005-2021 Data | 2022-2023 Forecast | Historical, tradingeconomics.com/greece/government-debt.


Comments

  1. Dr. Q September 20, 2021 at 6:03 PM

    Two questions: 1) Who is "thinking of" implementing this policy? 2) Which stakeholders are making the arguments you cite?

    ReplyDelete

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