By Chrysostomos Tsoufis
And 2023 will be a year with the escape clause activated and therefore more budgetary margins for governments. The difference, however, is that especially for heavily indebted countries like Greece, the clause does not mean a fiscal “white check” but there will be restrictions and therefore the Greek government will not be able to spend recklessly. That was the clear message from the Eurogroup that ended a while ago.
From the supportive fiscal stance we go to 2023 to the neutral according to the president of the meeting of the Ministry of Foreign Affairs of the Eurozone Pascal Donohiu. The situation in the Eurozone economy may be far from normal, as Commissioner Gentiloni told the post-Eurogroup, but the Commission’s general directive is that Member States should move beyond comprehensive support measures to targeted interventions. for those most affected. And of course there will be “special” restrictions for ..debt-exposed countries. And the “mix” of freedoms and restrictions will be agreed by the Eurogroup in July.
In 2023, however, the government will be able to implement both the abolition of the solidarity contribution and the reduction of insurance contributions since with its seal as it results from its positive 14th post-memorandum report. The measures mentioned in the report aim to reduce the high tax burden on households, to support the demand for labor and to increase the disposable income of households, which is expected to have a positive impact on consumption and economic recovery in general.
In fact, in a … unprecedented report, the technocrats of the Commission announce in advance new support package in September amounting to 0.4% of GDP, approximately € 800 million for which the government will need to vote on a 2nd additional budget !!!
The 14th report paves the way for the disbursement of € 748 million in June as it points out that Greece has taken the necessary measures to meet its commitments despite the pandemic and the war in Ukraine in areas such as financial management, property taxation, welfare benefits and justice.
The report also refers to the “orphan” installment of € 748m which will be disbursed well by the end of the year. Prerequisites for its disbursement will be the … surplus of post-memorandum supervision such as the settlement of overdue debts that is now placed for August, the land registry, the codification of labor legislation and interventions in primary health. The Commission is also drawing the government’s attention to red loans and unemployment, which may be falling but remain higher than anywhere else in Europe.
The exhibition is also the last stop before the country leaves post-memorandum supervision. By completing the prerequisites, the Greek authorities strengthened the Greek economy and at the same time reduced the secondary risks for the other euro area countries, thus “allowing” the Commission to suggest its termination.
Somehow, after August 20, the country will enter a new phase, since the post-memorandum supervision is the last element (after the repayment of the IMF and the lifting of the capital restrictions) that connected it with the … sinful past of the memoranda.
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