As is well known, the competent minister K. Hatzidakis prematurely announced on Wednesday from the economic forum of Delphi measures amounting to 870 million euros, wanting to put an end to the literature of extraordinary additional permanent measures that has begun to develop in view of the European elections. This, while not even a month has passed when both he and the prime minister categorically denied the rumor of an emergency Easter allowance for the economically vulnerable.
No deviations
The new principle of the economic policy is that the surpluses will no longer become extraordinary allowances, but fiscal “cushions”, which will ensure without deviations the achievement of the fiscal objectives and the “ceiling” of net primary expenditure which will now be the main criterion for assessing Greece under the new fiscal rules agreed in December. These rules typically apply from this year. However, we will have their full activation from 2025, when the legislative process will have been completed.
However, the numbers show that Greece has “learned its lesson” early on. This given that the implementation of the four-year debt reduction program for Greece, which will be discussed during the summer to be agreed upon in September, will begin with a “cushion” that comes from 2023, in the order of 600 million euros.
Exhibition
This is officially revealed in the annual report of the Governor of the Central Bank, where it is estimated that the primary surplus of 2023 reached 1.4%, i.e. 3 billion euros, instead of 1.1% of GDP, i.e. 2.4 billion. foreseen in the 2024 budget. This creates a ‘cushion’ for 2024 of around €600 million, which may be larger with the release of official figures for 2023 from Eurostat, and will help meet the ambitious targets for in 2024 and 2025, when the primary surplus should reach 2.1% of GDP and 2.3% of GDP, respectively.
Stockpiling will ensure budgetary targets and flow of resources from the TAA and the NSRF. However, it will provide a proper basis so that the government can implement its pre-election program without cuts or postponements. The ambitious target of an average growth rate of 2.5% in the period 2025-2027 can lead to institutional measures that will be more effective for everyone.
High growth will lead to faster income growth. In practice, this will mean an increase in incomes greater than what has already been announced, i.e. 950 euros for the minimum wage and 1,500 euros for the average wage. Another goal will be the faster reduction of the unemployment rate, especially in the direction of greater participation of young people and women in the labor market, which is among the lowest in Europe.
Tax evasion
Also, the effort to combat tax evasion will not only bring benefits for public revenues but also for social policy. By reducing undeclared resources, resources will be generated and after the review of the existing social benefits system and better targeting of benefits, there will be a further reduction in the poverty rate.
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