The new budget is drawn up with a ceiling focus on primary expenditure. To the General Accounting Office of the State, the agencies and ministries sent their proposals with the estimates regarding the expenses and revenues for the current year and 2025, and after the fifteenth of August, the relevant meetings at the Ministry of National Economy and Finance are expected to intensify.
According to the new rules of the Stability Pact, the main tool for fiscal discipline is primary expenditure, which will no longer be able to rise above the 3% limit. That is, Greece will not be able to exceed the limit of 115 billion euros next year, from approximately 111.6 billion euros this year. In this suffocating framework, all social policy measures should “fit”, from tax reliefs and benefits, to new recruitments in the State and increases in pensions.
At the same time, the country should fulfill the target of a primary surplus of 2.1% of the GDP, while, with the data to date, growth of the order of 2.6%, a de-escalation of inflation to 2% and a further reduction of the public debt are foreseen , to 146.3% of GDP in 2025 from 152.7% of GDP this year.
Who benefits?
However, the new budget will include the new interventions and reliefs totaling around 880 million euros, as the government has committed.
It will be about her new increase in pensions in line with the rise in GDP and inflation (cost around 400 million euros), the 0.5% decrease in insurance contributions (cost 225 million euros), the abolition of the pretense fee (cost 120 million euros), the permanence of the return of the EFFK to agricultural oil with the new method (estimated cost of approximately 100 million euros), the extension of the suspension of VAT on new buildings (cost of 20 million euros) and the increase in student housing benefit (cost 15 million euros).
At the same time, at Christmas, it is expected that there will also be an allowance for pensioners with a personal difference, which will be covered by the taxation of the surplus profits of the refineries at a rate of 33%, a fund estimated at 300 million euros. Based on the pensioner support model implemented last year, the allowance will range from 100 euros to 250 euros for pensioners with a personal difference and the sum of main and supplementary pensions up to 1,600 euros per month, and will cover around 770,000 pensioners.
It is noted that the goal of the government actors is to provide Christmas and an additional benefit to approximately 230,000 long-term unemployed, people with disabilities and other vulnerable citizens. Essentially, it will be the last emergency measure that the government will be able to give, after the “stop” that comes into effect from 2025 with the Stability Program. The final decisions on the amount of the aid, the criteria and the beneficiaries, will be taken at the beginning of September, when there will be a safe picture of the exact budgetary margins, according to the execution of this year’s budget and the level of development.
September, moreover, will also be the month of the Medium-Term Program, which will be submitted to the European Commission after negotiations with Brussels, and which, according to economic factors, should also take into account any geopolitical developments in the Middle East and their impact on energy prices.
Source: RES-MPE
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