IN fiscal surplus about 2% of GDP, it is believed that new Greek government in 2024, stepping up the adjustment efforts launched this year to return to a primary surplus of 0.7% of GDP, compared to a primary deficit of 1.6% of GDP in 2022, based on budget.

This direction is expected to be given European Commission to the Greek government on the basis of its anticipated announcement of member states’ “fiscal guidance” for 2024.

Negotiations are currently underway to revise it. Stability Pact According to sources familiar with the discussions, they are unlikely to make concrete decisions during the Swedish presidency this semester. I hope an agreement will be reached by the end of the year. This means that from 2024 there will be no time to implement the new Pact, but it will be relegated to 2025. Thus, in the meantime, in 2024, Member States will act on the basis of the “fiscal guidance” issued by the Commission. , with a special announcement, probably in March. This will be, according to sources, an interim regime between the complete abolition of the Covenant rules, with a general exemption clause that was introduced due to the coronavirus, and the full implementation of new rules from 2025.

The implementation of the new Stability Pact will be delayed until 2025.

In this context, it is likely that over-indebted member countries such as Greece will be grouped together and asked to make the necessary adjustments to maintain the sustainability of their debt. This adjustment assumes a primary surplus of approximately 2% of GDP, as recognized by the Ministry of Finance. The Commission’s autumn estimates project a primary surplus of 2.2% of GDP in 2024, compared to 1.1% of GDP in 2023, while the Greek budget projects a primary surplus of 0.7% of GDP this year. The adjustment from 0.7% of GDP to 2% of GDP in 2024 means a savings of €2.6bn, on top of a savings of €4.6bn this year projected based on the initial deficit set at level 1, 6% of GDP in 2022. However, it is estimated that less adjustment will be needed this year as the 2022 deficit is likely to close at a lower level.

This issue is expected to be discussed at ECOFIN on 14 March. The “Fiscal Guidelines” will be reflected in a specific way for each Member State in the relevant recommendations that the Commission will issue in May in the context of the European Semester. This will be preceded by the submission of stability programs for 2024-2026 by all Member States by the end of April.

It is noted that the proposal of the commission, which is on the table, to revise the Stability Pact provides for the abolition of the rule of annual debt reduction by 1/20 of the amount exceeding 60% of GDP. This allows an approach depending on the needs of each state, with an adjustment horizon of four years, with the possibility of extension for another three. The adjustment will be carried out at the expense of “net primary costs”, the growth of which should not exceed the medium-term growth rate.