The Minister of Finance, Christos Staikouras, spoke to the OPEN television station about six interventions at national and European level in order to deal as much as possible with the consequences of the energy crisis and the war in Ukraine.
The Minister identified these interventions as follows:
1. Subsidy for electricity and gas bills, to cover part of the price increases. The baseline scenario predicts that the price of gas will remain at current levels for the whole of 2022. So, more funds will be required from the state budget.
2. Improving the disposable income of the citizens. As e.g. with the reduction of ENFIA, which brings relief of 1 billion euros to individuals this year.
3. Increase of the minimum wage, which, according to the minister, will be “brave, but realistic”.
4. Targeted actions towards vulnerable households, with the “accuracy check”. Decisions, he said, will be made by the end of the month.
5. Radical decisions in Europe to tackle the energy crisis and decisions at pan-European level to support households and businesses.
6. Exclusion of defense expenditure from fiscal targets (debt and deficit). Greece has submitted a written request since November 15 last year and it seems that other member states are moving in this direction. If this happens, the minister said, a significant fiscal space will be created in the future for the benefit of the citizens.
At the same time, Mr. Staikouras described the significant adverse effects, saying characteristically, “calm down, we are at war. We do not know how the situation will develop. The picture is that every day is more unfavorable than the previous one”. As he said, the consequences concern the following:
Trade, with a major problem in cereals.
– Uncertainty, which increases the cost of borrowing, especially for Greece, which is not in the investment stage.
– Inflation and growth. Every 10% increase in energy prices (with gas having risen by 100% in recent days), increases inflation by 0.2 points.
– Tourism, with Greece being affected by the reduction of the disposable income of foreign tourists.
– Budget costs, for the support of refugees from Ukraine, assistance to this country, defense spending and support measures.
SOURCE: AMPE
Source: Capital
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