The return to tight fiscal policy and the phasing out of support measures due to the energy crisis point to Hellasindirectly, but clearly yesterday’s decisions Eurogroup.

In adopting the Commission’s line on “fiscal leadership” for 2024, eurozone finance ministers pledged in their post-Council statement “cautious fiscal policy aimed at ensuring debt sustainability over the medium large debt. in the Eurozone. In fact, Pierre Gramania, head of the ESM, during a press conference following the Eurogroup, referred to the increase in interest rates and the need to protect member states from possible medium-term interest rate risk. It is noted that the governor of the Bank of Greece, Yiannis Sturnaras, indicated that Greece should reduce its debt, returning to a permanent budget surplus, so as not to face the problem of paying interest after the grace period expires in 9 years. .

“We must avoid persistent measures that widen the deficit,” the ministers stressed in a statement, arguing that fiscal policy should support monetary policy in order to reduce inflation.

Eurogroup: Priority, ensuring debt sustainability in the medium term.

In particular, with regard to support measures against high energy prices, they made it clear that we need to gradually move from those that are generally supported to more targeted ones. As long as there is no rise in prices, the measures should be lifted, and if additional efforts are required, then only vulnerable and viable enterprises should be supported. Greece is the country that provided the third largest support from its budget as a percentage of its GDP, around 2.3%, and so it is now called upon to make one of the biggest adjustments. The government has already announced that measures to subsidize electricity tariffs are valid until the end of June. Also, there are no predictions. With today’s energy price data, the required fiscal support is almost zero, but if the data changes and prices rise, it will not be able to return to past levels of fiscal support. He will be forced to confine himself to the vulnerable. In 2022, according to the Commission, 80% of the aid provided by Greece, or 3.8 billion euros, did not reach the vulnerable (the economically weakest 40% of the population). The Council stressed yesterday that there must be incentives to reduce energy consumption, and this, in essence, means putting pressure on consumers through prices.

Minister of Finance Christos Staikouras however, speaking yesterday at the Eurogroup, he said that although Greece has allocated the third largest resources as a percentage of GDP to support households and businesses, at the same time it has managed to improve the stability of its public finances. However, he noted that along with monetary policy, which is becoming increasingly restrictive, fiscal policy will also tighten in the future.

After the Tempe tragedy, the finance minister spoke of the Greek government’s commitment to the high expectations that the economy is already showing, he said. It doubled the average European growth rate in 2022 and ranked 4th in terms of lowest inflation.