«We have exhausted the budgetary margins of the country in the last package of measures announced very recently. When the next fiscal space emerges in the coming months – we hope it will be through budget execution – and depending on how the situation in the real Economy develops, we will act again“, Stressed the Minister of Finance, Christos Staikouras, speaking at the First Program.
He referred to the information in a text of the Commission distributed at yesterday’s meeting of the Eurogroup, which shows that Greece has taken the most measures at European level between all Member States. «So we have to be careful in a logic “give more”. When we have given the most to Europe and the country already has a deficit in the last 2 years because we had to build a “safety net” for households and businesses, it needs attention“, He pointed out, setting the dimension of the markets. «When someone suggests easily and irresponsibly to give more, it means that suggests increasing the country’s deficit. That is, to increase costs even more in relation to revenue. This means that one has to finance this deficit, i.e. the markets. If we go out to borrow from the markets during this period, the cost of borrowing is three times higher than it was 3 months ago. This will have significant costs for Greek society in the coming years. We must balance responsibly with the present and the future of the country, society and the economy“, He continued.
According to him, the trend is for relative fiscal flexibility, “that is, taking into account the new pan-European and global crisis, the energy crisis and the sharp rise in inflation, there is a tendency for an extension of fiscal flexibility in 2023 as well“, Clarifying that”flexibility will essentially be accompanied by responsibility in terms of financial management».
«In terms of fiscal margins, Greece has a peculiarity, regardless of any fiscal rules that exist or do not exist and are referred for the future. It is not in an investment grade. This means that we must be doubly careful as a country in the way we handle public finances. Because the country is financed mainly through the markets, which means that we must have a tolerable amount of borrowing costs“, explained.
As Mr. Staikouras said, following the positive evaluation report by the Commission for the Greek economy, aopens the way for the release of 748 million euros and the enhanced supervision ends after 20 August. He made special reference to the fact that Greece, which since 2018 is the only country under enhanced supervision. «Supervision as other countries have, Spain, Portugal, Ireland and Cyprus, but our country has strengthened, with much more systematic evaluation every quarter. This will stop by the summer of 2022. So we return to European normalcy“, He underlined.
«The lifting of capital restrictions in 2019 by the current government, the early repayment of the IMF by the current government, and the completion of the enhanced supervisory regime in the summer of 2022, also by the current government, prove that Greece is returning to European normalcy. . So we will have an assessment from the summer onwards, similar to that of Spain, Portugal, Ireland and Cyprus“, write down.
“Internal political priority to be careful”
As Mr. Staikouras explained, the budgets have to do with all the countries of Europe, there is no particularity for Greece, but the peculiarity of our country lies in the fact that we are not in an investment grade.
«It is therefore an internal political priority to be careful in pursuing fiscal policy. In terms of the European context, Greece, along with some other countries, has indeed a high debt, so from this point of view of public finances we should be very careful in pursuing fiscal policy. But we will not be alone there, there are other countries that have had significant increases in public debt in recent yearsHe said.
Asked whether the government can pursue policies with these data like the ones he wanted in previous years, he answered in the affirmative, “provided there is budgetary space».
He reminded that beyond permanent government measures with reductions in ENFIA and taxation businesses and individuals, it was decided to extend measures such as abolition of the solidarity levy for private sector revenues and reduced insurance contributions and for 2023. “Our goal is until the budget is submitted, in September to October 2022, to extend the abolition of the solidarity contribution for all Greek citizens and civil servants and retirees “, he assured.
Asked about the possibility of there dialogue on fuel reduction, the Minister of Finance countered that it is not a matter of dialogue but of priorities that have been set at European and national level. «Most countries in Europe as well as Greece have not reduced indirect taxes in fuel, because it does not have the social dimension that a treatment has in targeting those who really need it. All the finance ministers have received a letter from the European Commission saying that the best approach with social characteristics is the targeted support of households and businesses that are most affected by the energy crisis. And that’s what we do. What we do from now on depends on the budget, when and if it arises, and on the priorities that the prime minister will set for any interventions.He added.
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