In the coming period, negotiations will begin with the Commission in order to finalize these objectives and integrate them into the 4-year Medium-Term Financial-Structural Program which will be presented by September 20th to the European Commission.
According to ministry sources of the National Economy and Finance, The above targets are compatible with fiscal policy planning for the coming years and “reflect the significant progress that Greece was successful in all variables those that determine the sustainability of Greek public debt”.
As the period after the outbreak of the pandemic (i.e. the three years 2021-2023) highlights, the debt-to-income ratio GDP in Greece it registered a decrease that is a record in the history of the euro zone.
At the same time, Greece returned to a healthy primary surplus, recovered its investment quality, thus significantly reducing the cost of public debt, and has a growth rate significantly higher than the European average.
“These positive performances are the result of a recognized successful economic policy, which allows the continuation of policies friendly to development and social cohesion”, note the same sources.
According to reports, the Commission’s proposals to Greece provide net primary expenditure growth of 3% in 2025, 3.1%-3.2% in 2026 and 2027 and 3% in 2028.
The limit to the growth of net primary expenditure shows how Member States, in this case Greece, can ensure that, at the end of a four-year period of fiscal adjustment (i.e. for the period 2025-2028), public debt can be considered as being on a downward trajectory or remaining at prudent levels in the medium term, with emphasis on the maximum expenditure limit.
As part of the preparation of the new Medium Term and the preparation of the budget for 2025, it has already been announced that next year the government will take additional measures to increase citizens’ income and further reduce charges for 2025, in the amount of 880 million euros.
These include:
– the reduction of insurance contributions by 0.5%, at a cost of 225 million euros.
– the reduction, essentially the abolition, of professional fees for professionals, in the amount of 120 million euros.
– the definitive return of the Special Consumption Tax to farmers, worth 100 million euros.
– the increase in the student accommodation subsidy (15 million euros).
– the increase in pensions, which based on the well-known mathematical formula, is estimated at around 400 million euros.
– the suspension of VAT on construction, worth 20 million euros.
Under the new fiscal rules, debt reduction is linked to a cap on expenditure growth as a “substitute” for the unenforceable condition of reducing debt by 1% of GDP per year.
The preparation of the new four-year medium-term financial-structural plan and its submission to Brussels after the summer consultations will take place by 20 September.
Another round of consultations will take place until November-December, which will be politically ratified by the Council of Finance Ministers.