Super-populist deputy Giorgos Perdikis wrote to Finance Minister Constantinos Petrides asking whether any other measures were being explored by the government in relation to rents. His question was in the context of the support measures for the economy taken by the government, such as the tax incentive offered to landlords who voluntarily lowered rents by between 30 and 50 per cent for a minimum of three months in 2020. What the populist Perdikis wanted to know was whether the government was considering any other measures.
Petrides gave the answer that the Greens deputy should have already known as he has been a member of the legislature for 19 years and should be familiar with the constitution of the country. In his written reply Petrides said: “We are of the view that the state cannot interfere in private contracts and affect the interests of the parties. This is safeguarded by the provisions of article 26 of the constitution which establishes the freedom to enter a contract.” Was it possible, Perdikis was not aware of this?
This was irrelevant because the question was asked in order to show the government tax incentive had been ineffective, having failed to tackle the problem caused by the pandemic. Many shopkeepers and other tenants reported that many landlords chose not to utilise the tax incentive, said Perdikis. Why would they, considering it was a voluntary scheme and the state could not force a property owner to utilise it? The tax benefit would be much smaller than what the owner would lose in rent, so why would anyone use it?
The truth is the government approved the relevant law last May because it was under pressure from the political parties to protect tenants, who saw their income fall because of the lockdown, and shops that were forced to closed.
It was a noble idea, but it was impracticable, because as the government explained when parties were demanding rent reductions, the state could not interfere in private contracts. The idea of the tax incentive was thought up by the government, as a way of appeasing the parties by showing it had tried to protect tenants.
A lot of time and effort was wasted in coming up with a scheme that nobody believed would work in order for the government to be seen to be doing something and silencing the parties which were demanding an unconstitutional measure. It is politics as theatre, made necessary by the prevailing populism of which Perdikis is a major proponent.