The next 10 days will determine whether the government will be able to capitalize on the outstanding revenue performance.
By Chrysostomos Tsoufis
The breath of all of Europe stopped at 7 am on Monday when the Nordstream 1 pipeline was closed for the next 10 days and its scheduled annual maintenance. One of the people who will be anxiously waiting to see whether or not Russia will allow the pipeline to reopen on July 21st is Theodoros Skylakakis. Literally it on or off the pipeline will determine the budget picture at the end of the year.
It is now considered certain that revenues from tourism this year will be at worst at the same level as in 2019. A reasonable estimate is that they will be increased by 10%, which according to the Deputy Minister of Finance will increase the GDP of the country by approximately 5 billion euro and will …transfer to public coffers additional revenues of up to 1.75 billion euros.
Under normal circumstances, with 1.75 billion euros in additional income from tourism alone – because at the same time unemployment is decreasing, consumption and investment are increasing and therefore income is also increasing – the government would have the opportunity to accelerate permanent tax reductions such as .x. the abolition of the solidarity levy already in the second half of the year. It could even to satisfy all pensioners with their retrospectives.
The next 10 days will largely determine whether the government will be able to capitalize on the outstanding revenue performance. If the Russians allow a smooth restart of Nordstream 1, gas prices will go down and therefore no additional funds will be required from the budget to subsidize electricity. The magic number is 100 euros/Mwh. As long as they stay in that area, the government doesn’t have to reach deeper into its pocket than it has calculated.
But now the natural gas and only under the fear of the closed tap is at 170 euros. And no one can predict where it will launch if the nightmare scenarios come true. In such a case, much more than the 1.1 billion euros budgeted by the government will be required to support households and businesses. And therefore, whatever tourism puts in one pocket, natural gas will take out from the other.
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