OT FORUM – Fin. Min.: An additional budget is coming

The Ministry of Finance will submit a budget supplement next week, which will increase spending by 2 billion euros, as Finance Minister Christos Staikouras announced yesterday, speaking at the OT Forum conference.

With the additional expenditure of 2 billion euros, an amount raised from the cash resources of 40 billion euros, the government’s goal is:

• To cover funding for some of the recently announced support measures such as the € 200 “inflation check” to be given before Easter to low-income retirees, families entitled to child benefit, people with disabilities and uninsured seniors.
• To finance additional interventions to deal with the effects of the energy crisis and the pandemic, such as the extension of the Co-Work program for two more months, April and May, but also the extension of the reduced VAT for another six months, until the end of 2022 in catering, transport, the tourist package, a measure which, as everything shows, is “locked”.
• Provide a “cushion” for any additional interventions that will be required to “relieve” households and businesses affected by the wave of precision. On the government’s table is the reduction of VAT on food, a “window” left open by the Prime Minister, who said this at the OT Forum while support measures are being launched in the primary sector, which, according to information, will be announced in the coming days.

The reduction of VAT

Regarding the possibility of reducing VAT on certain foods, the Minister of Finance stressed that such a decision will depend on the course of the economy, the development of the situation, given that by the end of April Greece will have to submit to the Commission the Stability and Growth Program with new assessments for the course of the Greek economy both for this year and for 2023 but also to ensure that the reductions will have a positive impact on the citizens.

On the issue of VAT, the government spokesman Giannis Economou stated, on SKAI channel, that there are always weapons on the table, however in the government there are concerns about the implementation of this measure. According to the government spokesman, the first concern is whether the reduction will reach consumers or will be “lost” to intermediaries, adding that the reduction of VAT would be a horizontal measure, while the government favors targeted measures.

The increase of expenditures by 2 billion euros that will be foreseen by the supplementary budget, as Christos Staikouras explained, does not increase this year’s deficit by the same amount. The financial staff is expected to review key figures of the economy by the end of April through the new Stability Program that it will submit to the Commission. It is considered certain that the growth bar will be lowered from 4.5% projected in the budget and will rise for inflation and the deficit.