The government is preparing a double package of benefits to support households and businesses

By Chrysostomos Tsoufis

Ready to move on new support package for households and businesses it is the government with the deputy finance minister Theodoros Skylakakis confirming speaking on SKAI radio yesterday’s publication of skai.gr.

Assuming that the situation with the international price of natural gas will not worsen enough to overturn the data (since Friday it has increased by about 30% but remains at a manageable level), in the government they are ready to fight everything for accuracy on the shelf.

As ELSTAT’s data for the month of October showed, inflation has already taken hold in food and is running at rates of over 15% in meat, dairy, oil, eggs, bread, while vegetables and coffee are also very close. However, the Ministry of Finance makes it clear that intervention is EXCLUDED to foresee a horizontal reduction in VAT as the government wants aid to go directly to households.

Very high on the government’s list of priorities are also measures related to fuel (although a drop in prices is expected here as the euro strengthens significantly against the dollar) but also loans given that we have entered a period of interest rate increases. The warning of the Governor of the Bank of Greece, Yiannis Stournaras, about the risk of an increase in bad loans is very fresh.

In addition to the better-than-expected run of the economy that inflates revenue, the government has or will secure resources from 3 additional sources:

-€374m will be collected by the end of the year from taxation with 90% of the surplus profits of energy producers for the period from October 2021 to June 2022.
-Second source of revenue is the extraordinary contribution to the surplus profits of the providers with the new mechanism that is being set up and will operate retroactively from August.
-From the beginning of 2023, approximately €300-400 million will enter the public coffers, according to the first estimates, from taxation at a rate of at least 33% of the refineries’ profits.

The final announcements on the amount of the fiscal space and how it will be utilized will be made by the prime minister and the financial staff in the debate on the 2023 budget, the final text of which will be submitted to Parliament on Monday, the 21st of the month.

However, the government – according to SKAI’s information – seems to have made its orders for a second package of benefits, probably just before the elections, whenever they are decided to be held. The reason for the famous €1 billion of the draft budget which as we learn has not been registered as a special reserve for the energy crisis but has been included in general spending which means that whenever the government decides it can be used as it sees fit.

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