Of Thasos Dasopoulos
It will fall into the “deep” as soon as the new financial template is formed, because in addition to the policy issues that it has prioritized, those that are obligations with near due dates also await it.
A second round of elections is now considered almost a certainty based on polling results thus far. If the second round is held at the end of June or the beginning of July, it will be necessary to wait a while for the programmatic declarations to be made, before the Government and the financial body are “functional”. The new finance staff will have to roll up their sleeves immediately as obligations in and out of Greece cannot wait.
The first of these is the preparation of the draft budget for 2024 based on the data up to now. Both an ND government and a SYRIZA government have announced a series of measures starting with public wage increases that need to be finalized, budgeted for and incorporated into the next budget. Likewise, the rest of the changes in individual taxes, which have been recently announced, must be incorporated. All these changes should result in a budget surplus, given that starting next year the fiscal rules will return and the country will have to demonstrate that it continues with the fiscal adjustment effort.
The new tax rules
Parallel to the preparation of next year’s budget, the new financial staff will have to negotiate, mainly with the European Commission but also with the ESM, on medium-term budgetary objectives. At this stage the debate on the framework of the new fiscal framework has begun, which will last several months with Greece taking an “excused absence” for the elections.
As of September, Greece will have to negotiate as an over-indebted Member State in addition to the objectives and the reforms and investments that it will have to implement. It is estimated that the objectives set by the 2023-2026 stability program presented a few days ago in Brussels include sufficient provisions.
In particular, a primary surplus of 2.1% of GDP is forecast for next year, which will increase until it reaches 2.5% of GDP in 2026. However, everything will depend on the period of approximately 3 months before the election. period, according to which the economy will be on “autopilot”.
support measures
In addition to the fixed obligations, the new finance staff will need to review the support package due to expire at the end of July-August. Since the pressure on the middle and low incomes due to food increases will continue at least until the end of the year, a measure must be found instead of the market pass, which at least covers the economically weakest. It will also be necessary to decide if the electricity tariff subsidy will finally be maintained in another way.
The recovery fund restart
Another great issue of immediate priority is the restart of the Recovery Fund, in terms of the implementation of milestones and goals so that the flow of quotas continues. During this time, an effort is being made to apply for the 3rd tranche of subsidies of 1.7 billion euros before the first round of elections.
Also pending is the signing of the loan agreement of 5,000 million euros for REpowerEU, the deposit of the 4th tranche of 3,500 million euros in autumn, but also the proposal for the mid-term review of Greece 2.0. before the end of time. All of this requires coordination between ministries and a multitude of legislative fixes to move forward.
EYDAP – EYATH
Both ND, through the mouth of the Prime Minister, and SYRZA have committed to fully comply with the decision of the compliance committee of the CoE, to return the shares of EYDAP and EYDAP that have been transferred to the Superfund, to public ownership.
The two main water companies are also included in the Fund’s profit-sharing clause (50% for debt payment + 50% for investments), but also in the 2018 agreement with the ESM for a guarantee of 25 billion euros of private ownership of the public against Greece’s debt by the ESM.
Therefore, a financial staff with sufficient arguments will be needed for the institutions to accept the change in the shareholding composition of Hellenic Holdings and Property Company (HPE). The six-month term set by the CoE for the return of the shares expires in September.