Brussels sets the limits for new support measures

By Tasos Dasopoulos

The final data for the development of 2021, but also the temporary financial framework that Brussels will set for 2023, especially for the indebted countries, such as Greece, will judge the measures against accuracy, which the financial staff plans to implement. .

As is known from the 2022 budget, Greece is committed to a significant reduction of the deficit by about 10 billion euros by the end of the year. This will be done mainly through the gradual withdrawal of measures to support the economy, to address the consequences of the coronavirus.

So far with the closing of the 13th rating, the financial staff has convinced with data that the growth for 2021 has exceeded 8% and maybe 9%, creating an additional budget space of about 1 billion euros. The additional fiscal space gave the opportunity to finance the reduction of ENFIA by 13% to 335 million euros, and to announce on Saturday the interventions to farmers amounting to 170 million euros.

In the previous days, the reduction of VAT on consumer food returned to the table of YPOIK, a new haircut in the amount of 3 billion euros to be returned by 770,000 companies that were supported with a repayable advance and -with less chances of implementation the reduction of VAT on fuel. All but the new reduction in repayable advances will be exceptional measures, but at a fairly high budgetary cost.

At the same time, in the coming days, as soon as the Ministry of Energy receives the relevant positive opinion from the European Competition Commission, it will increase subsidies for companies to 75% in February from 50% in January against energy prices. At the same time, it will continue to subsidize gas and electricity for households.

All this while lending to finance the new support measures in cash is becoming more and more expensive.

The EU sets the margins

All the interventions that are in the planning phase should “fit” in the framework that will be set by the European Commission next month. The “informal” fiscal rules to be announced for each Member State will also be the roadmap to be followed for at least 2022 and 2023.

This intervention is made because it is unknown when the new financial rules will be decided and implemented, while in the meantime, the Member States will have to submit their plans for the coming years.

In particular, the revised Stability and Growth Plans will have to be tabled in April, and the revised, medium-term fiscal strategy plans will have to be tabled in May or June. In order to do this, each country must know within what fiscal limits it will move.

In any case, from the notes with which it evaluated the budgets of each Member State, the European Commission pointed out the need in 2022 to have measures only to support employment and strengthen health systems.

The inflation factor is a new chapter and as it happened with the pandemic, no one can estimate from now on how far it will go and how long it will last. It is certain that in order to set limits, a provision for anti-accuracy measures will have to be incorporated. This is given that all EU Member States, even heavily indebted Italy, have taken steps to support their citizens and businesses. However, it is certain that for the heavily indebted states, the margins will be narrower. How much we will find out in a month from today.