At the top of the government's agenda remains the issue of the cost of living, with high fuel prices now constituting one of the most immediate and difficult equations that the Maximos Mansion is called upon to manage.The energy crisis and the uncertainty over the course of oil and natural gas prices limit the scope for safe forecasts, at a time when the pressure on the pockets of households and businesses is intensifying. The objective for the government camp is, on the one hand, to limit as much as possible the burden from fuel prices and, on the other, to maintain fiscal balance, so that resources are available for new interventions.
The Maximos Mansion has already announced that the first tranche of decisions on motor fuels will be announced on Wednesday, the day on which the Cabinet will also meet, while on October 14, on the eve of the start of the distribution of heating oil, the second wave of announcements is expected.
Discussions with the two refineries on the extent of their own participation in the effort to limit prices are currently underway.
The government's aim is to link the short-term handling of the energy burden with the broader policy of increasing disposable income. On the one hand with interventions on fuels and the heating allowance and on the other with tax relief and higher nominal wages.
Fluid landscape
What is critical, they acknowledge in the economic staff, is the timing and extent of the intervention, also given the fluid landscape against the backdrop of developments in the Gulf. The message being sent is that the country has reserves to deal with the next difficult months, precisely because not all proposals were adopted -mainly those of the opposition- for immediate and horizontal interventions without there first being clear costing.
At the same time, Athens is expected to raise the issue at the European level as well. The official position is that no national government can on its own absorb for a long period the consequences of an international energy crisis, as long as oil and natural gas prices remain at high levels. For this reason, greater fiscal flexibility at the European level is being sought, so that member states can support their societies without endangering their fiscal stability.
Kyriakos Mitsotakis thus returned to Athens after a week in the US, with a difficult political front ahead of him.
As he mentioned in yesterday's weekly post with the review of the government's work, “in New York I had a meeting with more than 30 institutional investors with exposure to Greece and to the largest Greek companies, whose total assets under management exceed $4.5 trillion. I reiterated that the prudent fiscal policy that forms the basis for achieving surpluses and allows the rapid de-escalation of debt is our priority.
However, the most important immediate government priority in a period of great international uncertainty and turbulence is addressing the cost of living, mainly through limiting energy costs with an emphasis on heating oil, but also in the medium term through increasing disposable income, with further tax relief and higher average nominal wages”.