Her recommendations European Commission, last week to Greece determined that the increase “net primary cost» in 2024 it should not exceed 2.6%. “Net Primary Expenditures” is a new measure of fiscal compliance included in his proposal. Commission For new stability pact and is being tested for the first time with its 2024 recommendations, as the Pact is expected to be implemented from 2025.

Net Primary Expenditure is the total government expenditure minus interest and income received from European Union (FSRF, Recovery Fund, etc.) and possible new permanent measures on the revenue side.

In the case of Greece, the corresponding amount in 2024 is estimated to be around €95 billion, so the allowed 2.6% spending increase is around €2.5 billion.

The European Commission proposes that the increase in “net primary spending” in 2024 should not exceed 2.6%.

The finance department claims that additional costs of about 1 billion euros are constantly required, for example, due to inflation, an increase in the price of state-owned materials, an increase in fuel, etc. Her schedule N.D. it includes additional spending of 1.3 billion euros in the first year, including an increase in pensions and salaries of civil servants, so the difference indicated by the European Commission is barely covered.

However, what is important is that the new net primary cost measure leaves no room for additional costs in the event of “fiscal space” that would result from a situation such as, for example. good tourism course. Any such extraordinary revenues should be aimed at improving the financial result, i.e., increasing the primary positive balance.

But the opposite is also true: that is, in the event of a potential recession, the government will not be required to stifle the economy and cut spending too much to meet the targets. As already noted, this measure serves the countercyclical logic. Of course, in practice there will be negotiations and adjustments.