Through a series of interventions, the government is trying to spread a safety net around vulnerable households, but also the middle class, which are particularly affected by high energy costs and strong inflationary pressures.
As Finance Minister Christos Staikouras stressed, «we are doing the best we can based on the fiscal space and with social targeting of the vulnerable. The priority is to support those who are really in need and not to support everyone horizontally».
The pillars of support for society are the provision of benefits to vulnerable social groups, horizontal support for households and businesses in the face of high energy costs, the indirect provision of liquidity to businesses, professionals and workers, and tax cuts. All of the above contribute to supporting disposable income from the shrinkage caused by inflationary pressures.
According to the Finance Minister, «we are keeping fuel for the future, because there is great uncertainty. We will help households and businesses and keep supplies for the future.“.
Let's look in detail at all the interventions that have taken place so far.
1. Benefits
Precision check: Shortly before Easter and probably during Holy Week, the «accuracy cheque» will be granted and will affect 1.4 million households. The total cost of the interventions for the vulnerable is €324 million.
In particular, the structure of the beneficiaries is differentiated in the individual categories of the vulnerable as follows:
- It is foreseen to grant 1.5 additional monthly instalments of child benefit in April to March beneficiaries, i.e. an instalment corresponding to 1.5 months. The amount of the allowance is, depending on the level of income, EUR 105 or 63 or 42 for each child up to the first two, and EUR 210 or 126 or 84 from the third and for each subsequent child. There are 625 000 beneficiaries, with more than 1 million children.
200 euros of aid is granted to 677,000 low pensioners, as was the case at Christmas.
An allowance of €200 is granted to 35,000 uninsured elderly people.
A €200 subsidy is granted to 167,000 beneficiaries of disability benefits.
A double instalment of minimum guaranteed income is granted to 240,000 beneficiaries.
2. Support against high energy costs.
* Fuel subsidy: a subsidy to cover part of the increased costs, with a reference point of 60 litres of fuel per month. The subsidy is equal to 22 cents per litre and the subsidy is for 3 months, up to €40 and up to €50 in the islands. For motorcycles the amount is 30 euros per quarter. The income threshold is 30,000 euros. Through gov.gr, beneficiaries will fill in their details on the special platform and after cross-checking the data, they will receive the subsidy in one go for the next three months.
* Horizontal reduction of about 15 cents per litre for diesel at the source, i.e. at the pump. The measure is horizontal and will apply for April.
* Electricity - natural gas: More state support will be provided by the government to households and businesses for April. The largest increase in gas supply for the government is foreseen for February. 80% more than in February, from €40 to €72. The corresponding support for the Social Tariff (STS) is even higher, rising from €53 in March to €87 in April. For gas, the support in March will be similar to February, while for April the amount will be reviewed again.
* Businesses: Even greater support will be given to businesses, which will be twofold. There will be more support for small and medium sized low voltage businesses and a doubling of the discounts for business consumers from €65/MWh in March to €130/MWh in April. The measure concerns 1,160,000 professional services, such as restaurants, shops, kiosks, convenience stores, hairdressers, offices and bakeries. For all of them the additional subsidy will be 100 EUR/MWh, which will also be granted to professionals with a power supply of up to 25Kva bringing the amount of state support to 230 EUR/MWh. At the same time, these businesses will be granted additional funding of EUR 75 million for the retroactive subsidy of all electricity consumption from the beginning of the year until March, with the aim of absorbing retroactively the 80% of the indexation clause.
3. Liquidity
* Minimum wage: as of May 1, a brave, as government officials say, increase in the minimum wage is coming and will come on top of the one already in place since January 1.
* Refundable: The measure will affect around 700,000 professionals and businesses and will be paid in 96 instalments, up from the current 60 instalments. Repayment will start in the summer. An extension is also given to the possibility of a one-off repayment of the debt with a «haircut» 15%.
4. Tax reduction
* ENFIA: The new ENFIA for 2022 will be 354 million less than last year. About 6 million property owners, representing 80% of the total, will pay less, while 14% of property owners, about 875,000 taxpayers, will pay the same tax they paid last year. Compared to 2018, the reduction is of the order of 920 million.
* Maintaining the freeze on the special contribution for private employees, but also maintaining the reduction in social security contributions.
Finally, as Prime Minister Kyriakos Mitsotakis has said, the government's aim is to extend the abolition of the solidarity levy and low insurance contributions to all in 2023, while the Finance Minister has stressed that the reduced VAT rate for catering, tourism and transport is to be maintained.
Thanasis Papadis
