Greek Leader Pledges Military Boost Amid Tension With Turkey
(Bloomberg) -- Greece will buy French jet fighters to strengthen its military and spend an extra 6.8 billion euros ($8 billion) to counter an economic slump brought on by the virus pandemic, Prime Minister Kyriakos Mitsotakis said.
The premier announced a set of 12 measures, including a further reduction of social-security contributions for companies and employees, while also vowing to protect Greece amid growing tension with Turkey over energy exploration.
That includes the immediate purchase of 18 Dassault Aviation SA Rafale fighters, said Mitsotakis, fresh from a meeting with President Emmanuel Macron in France on Thursday. Greece also plans to buy four new frigates, additional missiles, new helicopters and to add 15,000 troops over the next five years.
“It’s a move that strengthens our deterrent power,” the Greek leader said Saturday in a speech in Thessaloniki laying out his agenda for the next year. “And which, in combination with the modernized F-16 and the rest of the Greek fighters, can’t be ignored by anyone.”
The economic package abolishes so-called solidarity tax for private-sector workers for 2021, doing away with a measure imposed during Greece’s bailout programs during Europe’s debt crisis.
The goal is to entice private investors to create jobs. The government will also give tax incentives to companies that invest in the green and digital sectors and abolish property taxes for 26 small islands.
“The National Confidence Plan protects and stimulates employment because the consequences of the pandemic are more pronounced there,” Mitsotakis said. Greece also has the cash reserves for more support if needed, he said.
Greece is expecting the economy to shrink about 8% this year, adding to a cumulative loss of about 25% of gross domestic product during the debt crisis. Unemployment increased to 18.3% in June from 17.3% in May.
While that is lower than the peak of almost 30% during the crisis, it’s still the highest rate in Europe.
To fight unemployment, the state will pay social contributions for new hires for the next six months on the condition that the benefiting company won’t cut jobs, Mitsotakis said.
“The time has come to move from subsidizing unemployment to boosting work,” he said.
French Defense Minister Florence Parly welcomed Greece’s intention to buy Rafales. It would the first European country other than France to purchase the fighter, she said in a statement.
Tensions between Greece and Turkey are rising as Turkey actively started searching for oil and gas in contested waters of the eastern Mediterranean.
Greece says islands must be taken into account in delineating a country’s continental shelf, in line with the UN Law of the Sea, which Turkey has not signed. Turkey argues that a country’s continental shelf should be measured from its mainland, and that the area south of the Greek island of Kastellorizo — just a few kilometers off Turkey’s southern coast — therefore falls within its exclusive zone.
Greece is a peaceful country seeking agreements with all neighboring countries, including Turkey, Mitsotakis said. “The end of the provocations is the preface of the discussions,” he said.
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