A special framework for Foreign Direct Investments is introduced by the Ministry of Development bill that is being discussed tomorrow in the Plenary.
The bill seeks to address the need to provide targeted investment incentives for investment plans that are financed by non-domestic capital, as well as the need to organize uniform procedures for their evaluation, approval, monitoring, and completion.
The special regime for granting state aid to non-domestic investment capital concerns investments in the sectors of:
- manufacturing and industrial production,
- research, applied innovation and artificial intelligence
- industrialized primary production
- biotechnology
- the defense industry and aeronautics
- the supply chain
- storage (logistics)
- the Health sector - Recovery and Rehabilitation Centers
- social welfare - Elderly Care Home Service Provision Centers.
The aid regime will concern tax exemptions, fast-track licensing, issuance of approvals and permits within two months from the submission of complete files, provision of loans guaranteed by the Hellenic Development Bank, facilitation of the granting of residence permits for the implementation of the investment plan and the operation of the investment.
The eligible cost of each investment plan must range from 10,000,000 million euros to 50,000,000 million euros. At the same time, upper limits are set on the aid granted, so as to ensure the proportional allocation of public resources and compliance with the state aid framework. Thus, the total amount of aid cannot exceed 20,000,000 million euros per investment plan, while the aid granted to cooperating and affiliated enterprises cannot cumulatively exceed 20 million euros and 50 million euros respectively.
According to the explanatory report of the bill, the new regime seeks to increase investment interest from abroad and the utilization of non-domestic investment capital for the development of the Greek economy.
From the first day of processing the bill in the competent parliamentary committee, the Ministry of Development clarified that “no grants are provided for, but tax exemptions and licensing, in order to facilitate productive investments that will contribute to productive transformation, to the creation of better-paid jobs, and indeed in areas for which the government is promoting their development, based on a strategic plan.
During the second reading of the bill, the New Democracy rapporteur, Neoklis Kritikos, said that the investment plans to be financed by non-domestic capital will be linked to qualitative development goals in order to function as a lever for sustainable development, creating new quality and better-paid jobs. The legislator’s main pursuit lies in channeling foreign capital into investments with a full implementation and operation cycle in order to strengthen development activity and the economy, Mr. Kritikos said.
It should be absolutely clear, with a relevant rewording in the bill, what constitutes non-domestic capital, stressed the PASOK rapporteur Giorgos Nikitiadis and asked that the definitions given by the OECD and the International Monetary Fund be included. PASOK also sets as a prerequisite, for its final stance in the plenary of Parliament, that the tax incentives be specifically and analytically provided for, in such a way that the national representation knows what the amount of the tax exemption will be before voting and “not for the tax incentives to be left to the judgment of the minister when he himself decides to announce whatever regime”.
“There is the homeland that pockets it and there is also the homeland that bleeds,” commented the KKE special rapporteur, Christos Tsokanis, and denounced: “Those who pocket it are shipowners, industrialists, energy groups that you do not touch, they are tourism groups, they are logistics centers, they are the banks, they are the strategic investors, all those who enjoy what you want to pass even into the Constitution. What do they enjoy? Tax immunity. Am I lying? That is how it is, tax immunity, contribution immunity and privileges.”
The special rapporteur of Greek Solution, Vasilis Viliardos, said that the tax exemption must be limited exclusively to the net profits arising from the activity of a specific aided investment, with the keeping, indeed, of separate accounting monitoring. Also, the definitive establishment and commencement of use of the tax incentives should be strictly linked to the completion and the start of the productive operation of the investment and it should be ensured that the incentives provided will not create adverse discrimination against existing domestic businesses operating in the same market, through the parallel strengthening of the corresponding regimes of the development law.
The bill does not lead to the goals it describes, said the SYRIZA special rapporteur, Christos Giannoulis, and announced that in the discussion to be held in the plenary, the government will have to provide answers to questions raised by the social majority about its survival and the survival of the country, that is, on issues having to do with the price rally, the inability of households to cover basic needs, the government’s unwillingness to proceed with a substantial intervention to reduce fuel prices.
“This is a deeply problematic, hasty and dangerously opaque bill, which does not serve the substantial productive reconstruction of our country, but institutionalizes preferential arrangements for a select few, violating every notion of equality before the law and national interest,” said the special rapporteur of “Niki” Komninos Delveroudis. He also denounced that the government is asking for a blank check instead of setting a strict, transparent and fair regulatory framework, which would attract serious long-term investments of knowledge intensity and domestic added value.
There are not even the necessary guarantees for the labor regime, said the special rapporteur of Course of Freedom, Alexandros Kazamias. He also commented that the government must explain from which fiscal space, which the government constantly invokes, the tax exemptions will be covered. “We do not want incentives for multinational companies from third countries in order to acquire nursing homes in the country, or for even more functions of Public Health to be given to private individuals who will ultimately burden the citizen’s pocket when he wants to have serious healthcare treatment,” the Course of Freedom MP said.
A large part of the interventions by opposition MPs concerned the measures announced today by the prime minister. “Once again, we became 'witnesses' to a cost-free, populist treatment of the parliamentary process on the part of the opposition. Whenever some measures are announced, the opposition engages in unconditional outbidding, which has nothing to do with the real endurance and capabilities of the Greek economy, it simply wants to 'sweet-talk', because it knows that it will never be called upon to implement what it proposes. Our difference, therefore, from the opposition is that we stay away from slogans and easy solutions,” commented the attending Deputy Minister of Development, Lazaros Tsavdaridis. Regarding the support measures announced by the prime minister, the Deputy Minister of Development noted:
- the goal is to support society without undermining the endurance of the economy
- due to the fluidity of the situation, interventions will now be examined every fortnight
- any broader initiative should also have a European seal and for this reason, the prime minister sent a letter to the president of the European Commission, so that the member states may acquire extraordinary flexibility to deal with the crisis.
In relation to the bill, Mr. Tsavdaridis informed the Parliament committee that the new organic unit for foreign direct investments will be ready within two months.
Responding to the criticism that “everything will be regulated by the executive power,” the Deputy Minister of Development said that the incentives will be regulated only by proclamation, so that there is the necessary flexibility and adaptability of the investment framework to the prevailing fiscal conditions and capabilities, as well as to changes in EU state aid law. He also pointed out that a higher amount of aid for border and island regions will be determined by the proclamation.
SOURCE: ANA