Window on new support measures against accuracy

By Tasos Dasopoulos

Before the implementation of the package of 3.2 billion euros for the electricity tariffs, the Ministry of Finance does not rule out that new support measures will follow, as long as the price level remains at high levels.

The Minister of Finance, Mr. Christos Staikouras, left open the possibility yesterday, but on the condition that there will be a new fiscal space. Other competent sources from the Ministry of Finance stressed that at this stage priority was given to the biggest problem which is the prices of electricity, in view of the summer when consumption due to weather conditions will increase sharply.

He acknowledged, however, that as the months went by, the problem with food prices grew, affecting the most vulnerable. In this regard, they in turn stated that the support will continue as soon as the results of the recently announced measures are measured.

The now-famous fiscal margin is “hidden” again this year in many conservative budget forecasts, fearing a worsening of the current crisis. Forecasts concern the course of tourism, the course of tax revenues and finally the growth rate of the economy for this year, which is expected to be much higher than the 3.1% of the official estimate.

In particular, in the forecasts incorporated in the Stability Program 2022-2025 there is one of the main assumptions that tourism for this year will reach a turnover of 85% of the record turnover of 18 billion in 2019, ie 15.3 billion euros.

However, the forecasts of travel agents and hoteliers, from the tourist traffic so far and the reservations, predict that the turnover of tourism may reach or even exceed the turnover of 2019 this year.

Tax revenues

In terms of tax revenues they also have a good chance for many reasons to go as well as those of 2021, despite the energy crisis.

In direct taxes it is known that many taxpayers will pay a reduced tax on the income of the previous year, since for some months they were paid with special purpose compensation which is excluded as known from the taxable income. Also, for this year both the income tax and the – also reduced – ENFIA will be paid in more installments.

Therefore, there are not many reasons for an unnatural increase in debts to the ephorates. High inflation also feeds the budget with additional revenues from indirect taxes imposed at higher prices.

Bond earnings income

In addition to regular revenues, this year’s budget also hides some extraordinary revenues. In particular, in the context of Greece’s exit from enhanced supervision, Greece should receive the last two installments of bond profits totaling 1.3 billion euros.

Normally, we should get a € 640 million tranche in June with the Commission’s decision to step out of enhanced supervision. However, a second installment is pending from 2019 when due to the general elections an evaluation was postponed and 640 million euros were not paid.

Installments from bond profits are not recorded in the regular budget revenue. They are calculated only on the primary balance sheet under enhanced supervision. So after the end of the enhanced supervision, both the summer installment and the second installment that will come close to the end of the year, will now be recorded in the extraordinary income.