The crucial decisions for the economy within the week

By Tasos Dasopoulos

The extension of the “umbrella” of protection of Greek bonds until 2024 and the decisions for a common European stance on gas supplies, measures to support economies and a common defense policy, are on the agenda of two important international meetings this week.

The first will take place in Frankfurt. At its two-day meeting, the Governing Council of the ECB is expected to decide at the very end of the Extraordinary Bond Purchase Program (PEPP), to “complete” the decision it took last December for Greece. The missing part of the decision on the case-by-case support of Greek bonds until the end of 2024, was the extension for the same period of the eligibility of Greek bonds as collateral for the financing of Greek banks. The decision was more or less expected, since the ECB has already bought Greek bonds worth a total of 38 billion euros. However, it was delayed in coming, creating concerns among the holders of Greek titles. The vice-president of the ECB, Mr. Louis de Guidos, almost announced the decision, speaking yesterday, at a banking conference in Athens, noting that the issue will be closed “soon”.

Dealing with the energy crisis

The second package of crucial decisions is expected from Brussels and the Summit on Thursday and Friday, where the consequences of the Ukraine war and their response will be discussed.

The first important issue to be discussed will be the European-level effort to free the EU from Russian gas. Joint action on the creation of pan-European stocks and the joint supply of fuel will bring – when it works – the normalization of prices, something that has been supported many times by Greece and other countries in the European South, which are proportionally more affected by energy crisis.

The second important issue that literally “burns” Greece, is the continued support of the EU economies, in the face of the continuous rise in oil and gas prices. At the previous Versailles Summit, the French Presidency tabled the proposal to create a new European fund for energy and defense to be financed by a new Eurobond. The idea was initially rejected by the countries of the European North . Yesterday, however, the commissioner in charge of financial affairs, Mr. Paolo Gentiloni, reiterated the scenario, emphasizing that it will be discussed in the coming weeks. The context of the debate will be determined by the forthcoming Summit. Greece and the other heavily indebted countries are waiting for a European solution that will enable them to continue supporting households and businesses, without fear of running out of deficits and debt.

Common defense policy

Finally, the creation of a common European defense policy will be discussed at the Summit on Thursday and Friday. This project, which is in its early stages, also goes through the defense expenditures of the Member States, which will henceforth have to be coordinated with each other. The issue of defense spending is of particular importance to Greece as the Ministry of Finance has submitted a substantiated proposal for the exclusion of Member States’ defense spending from the calculation of deficit and debt. In fact, in the recent debate on a common European defense policy, Greece has found allies in its demand for special management of defense spending, as each new weapons system will strengthen the defense of the whole of Europe.

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