Negotiations with the European Commission will begin in the next period in order to finalize the objectives and integrate them into the 4-year Medium-Term Fiscal Structural Plan that will be submitted to the European Commission by 20 September.
According to sources from the Ministry of Economy and National Finance, the targets defined are compatible with fiscal policy planning for the coming years and “reflect the significant progress achieved by Greece in all indices that determine the sustainability of Greek public debt”. .”
In the period following the start of the pandemic (i.e. the three years 2021-2023), the debt-to-GDP ratio in Greece showed a record reduction in the history of the eurozone.
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.
“This positive performance is the result of a successful economic strategy, which allows the continuation of policies that encourage development and social cohesion”, noted the same sources.
According to sources, the Commission’s proposals to Greece envisage an increase in net primary expenditure of 3% in 2025, 3.1%-3.2% in 2026 and 2027, and 3% in 2028.
The cap on the growth of net primary expenditure shows how Member States, in this case Greece, can ensure that, at the end of a four-year fiscal adjustment period (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.
Meanwhile, the government announced that it will move forward with additional measures to increase citizens’ income and further reduce charges for 2025, amounting to 880 million euros.
These include:
- the reduction of insurance contributions by 0.5%, at a cost of 225 million euros.
- the reduction, essentially abolition, of the professional price of professionals, in the amount of 120 million euros.
- the permanent 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, estimated at around 400 million euros.
- the suspension of VAT on construction, worth 20 million euros.
The preparation of the new 4-year Medium-Term Fiscal Structural Plan and its presentation 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.