All facts and information confirm that economic policy will keep its mix almost unchanged in 2025with only minor corrections and partial adjustments that do not change its means and tools, nor its goals.
It is widely believed that the government will stick to the current doctrine, avoid anything likely to disrupt current fiscal stability and not risk any crack in the flow of tax revenues, which are known to be largely determined by its collections. VAT and income tax.
Self-restraint
Spending will move within the limits of +3% provided for by the new stability pact for countries with high public debt, with the finance minister Kostis Hatzidakis to clarify, in view of the Prime Minister’s upcoming announcements in Thessaloniki, that the Commission urges the Greek government to restrain itself and not to exceed the increase of 3 billion euros in the 2025 budget from those of 2024. Something that the Minister of Finance probably shares , although he states that he has already committed about 1 billion euros for additional spending on Health and Education, another 1 billion euros for pensions and about another 850 million euros for defense.
The Prime Minister announced from Thessaloniki that in the three years until the 2027 elections, hundreds of investment projects will be developed, amounting to 100 billion euros.
He claims, as he says, something more than 3 billion euros, but basically he seems ready to adjust to the Brussels limit. On the revenue side, he is more categorical.
He recently extolled the outperformance of VAT revenues, which increased by 10.7% in the seven-month period from January to July, as well as the performance recorded in income tax collections, basically denying any substantial intervention in the area of indirect and direct taxation rates. .
The compass
He even defended them, stressing that he is not going to do anything that could destabilize fiscal stability. Explaining the doctrine governing the current economic policy he clarified that “we can’t spend more than we take in.”
Essentially, he adopted the absolutely conservative principle of the “balanced budget”, this is his compass and the government will walk with it, in order to maintain the favor of the international markets, the approval of the rating agencies and of course the tendency to reduce the public debt unchanged, so that to decline to almost 133% of GDP at the end of the current decade, as predicted by the International Monetary Fund.
It basically prepares for 2025 a scheme of controlled, without outbreaks, economic policy, which will not take risks, but will maintain the atmosphere and climate of fiscal restraint, even though the demands of society are multiplying and the times, geopolitical, climatic and productive, impose and other provisions beyond the insurance of public finances.
Options
The feeling is that the government of Mr. Mitsotakis it exploits, among other things, the deep crisis and weakness of the opposition, torn apart by internal conflicts and quarrels, to position itself adequately against the country’s problems and to claim other solutions. Essentially holding on, he has chosen to manage conservatively the first two years of the second four-year term and to “load up” from 2026 onwards, in view of the national elections in the spring of 2027.
Greek society is in a process of long tolerance and waiting and at some point it will explode and put everything at risk.
All the data and information confirm that in the period between 2024 and 2025 it will seek to fully exploit the stock of financial resources and tools, that is to prepare the full absorption and utilization of the resources of the Recovery Fund, the NSRF and to redirect to related areas the expenditure of the Public Investment Program.
The Prime Minister already last week announced from Thessaloniki that in the three years until the 2027 elections, hundreds of investment projects, public and private, will be developed in the remaining development political regions of the country, totaling 100 billion euros.
The investment leap
He even went so far as to talk about an investment jump similar to the post-war Marshall Plan, which, if developed, can completely change the country’s image and position in the wider region. The interesting thing is that it talks about a network of strengthening public infrastructure, in health, education, trains, ports, transport, industrial zones, new technology parks and others, interconnected with community-funded private investments in a multitude of productive sectors, from energy and modern technological goods, to food and tourism.
According to the plan, the network of combined public and private investments, developing in the three years 2025 – 2027, will form an environment of creation, development and opportunities, within which there will be scope for increasing wages, improving incomes, reducing unemployment and regenerating areas that were steadily deteriorating in the last two decades.
Opening barrage
Apparently, Mr. and Mrs. Mitsotakis and Hatzidakis are holding back for later. They will exhaust all the margins of development prospects and then from the autumn of 2026, entering the 2027 election, they will attempt any major changes in economic policy, simultaneously indulging in a barrage of inaugurations, which are supposed to confirm progress and the achievement of the “second convergence” invented by Akis Schertsos and adopted without a second thought by Mr. Mitsotakis.
The first, as is known, in the years of his second term Kostas Simitiswas drowned in scandals and later in the unreliability of his new democratic successors who, despite the promises, left the country unprotected and completely exposed to the threat of bankruptcy that developed after the international financial crisis of 2008.
Resource utilization
Now Mr. Mitsotakis shows that he wants to follow a safer path, maintaining, as far as possible, fiscal discipline and putting all the weight on the creation of new wealth through the exploitation of the multitude of resources. The interesting thing is that the same model, the same logic, is also followed by the banks, which take advantage of the difference in interest rates, take care of their viability and profits, finance the safest investment projects and avoid like the devil the financing of small and medium enterprises.
Greek society
It is characteristic that even the development of housing credit, once profitable for them, depends on government initiatives and facilities and on the incentives that the state will offer to new families to acquire housing.
In general, neither the Ministry of Finance, nor the banking system take the risk they are responsible for, rather they act with only the safety of their organizations in mind. But with the difference that Greek society is in a process of long tolerance and waiting.
At some point it will explode and put everything in jeopardy, as the steady alienation of citizens from all parties, including the ruling party, indicates. This is a parameter that apparently neither Mr. Mitsotakis nor the prominent bankers assess with due care…
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