The timetable for the new anti-accuracy measures

By Tasos Dasopoulos

March will be a key month to strengthen the grid of precision measures, in addition to subsidies for electricity and gas, which are expected to increase further for businesses in February.

Next month, in addition to the final picture for the growth of 2021 which is expected to be revised for the fourth time at 9%, we will have available the framework that Greece can move for 2022 and 2023 by the Commission. Formalizing the additional fiscal space that will result from the even higher growth of 2021 and also knowing the goals that should be achieved this year and next, the Ministry of Finance will choose which of the measures to implement.

Information from the Ministry of Education wants the interventions that will be made to have a duration of one quarter. At the end of the first half of the year, an “automatic” reduction of inflation is expected, since now, from the summer, the high prices of 2022 will be compared with the also increased prices of 2021 and the fatal increase of prices will appear smaller.

So far, the measure that is least likely to be implemented is some extraordinary reduction of indirect taxes on fuel (VAT, VAT) since in addition to the risk that the tax reduction will not pass to consumers, the budgetary cost is huge (total revenue from indirect taxes on fuel amount to 6.5 billion euros per year). With regard to the reduction of VAT in a “basket” of consumer food, the measure is still being processed so that, whenever it is decided, it can be applied immediately.

If the reduction of VAT does not proceed – due to costs – there is as a thought and an extraordinary allowance for financially vulnerable households, probably during the Easter holidays, although the idea is criticized that this is some money that will be given once and will not solve the problem.

The further reduction of 3 billion euros from the repayable advance, from 8.3 billion euros which strengthened about 770,000 companies in the two years 2020-2021, is expected to be examined in detail in April or May. The disadvantage to this measure is that it is very expensive and does not concern households. On the other hand it is crucial to maintain liquidity in business.

By agreement of the institutions

It is certain that whatever decision is made will need to have the consent of the institutions before proceeding. During the 13th evaluation, the financial staff had informed of their intentions to proceed with additional support measures against accuracy.

Of course, there was no information on the final measures that will be implemented and much more on their cost. Before doing so, the package must be finalized by the Greek side so that the budgetary costs of the measures for 2022 can be discussed.

Lenders’ representatives are not expected to get excited, however, as they expect Greece to adhere to the reduction of the primary deficit from 6.5% of GDP, which closed last year to 1.4% of GDP at the end of the year.