The government is signaling its intention not to reveal all its cards for tackling high prices. Kyriakos Mitsotakis' choice is, because of international uncertainty, to keep reserves, to gauge the budget's endurance and to intervene whenever the data require it.
Fluctuations in energy prices and above all the unpredictability of the geopolitical crisis are leading the Maximos Mansion to a policy of gradual moves, with its gaze also fixed on possible future pressures.
The prime minister, returning from the US, has set as a goal to make use of the fiscal possibilities created by the resilience of the Greek economy in order to support incomes, without however jeopardizing fiscal balance. Thus, the next interventions are not expected to take the form of a single package, but to unfold in… installments, depending on developments.
Specifically, instead of one large and front-loaded package of interventions, it is opting for successive moves, which will be adjusted to the data that are shaped each time. The logic is that the country's fiscal capacity must be used in a way that leaves available “ammunition” for the next day as well.
This direction is expected to be reflected in tomorrow's Cabinet meeting as well, where Mr. Mitsotakis is expected to give the outline of the next government moves. The first milestone is already known: tomorrow the announcements on fuels and on October 14 the interventions on heating oil.
In this way, the economic staff is trying to keep room open for new interventions, if international prices and developments in energy require it. Indicative is the statement by the press representative of the Ministry of Finance, Omiros Tsapalos, according to which the subsidy on diesel will be evaluated every fifteen days, as international fuel prices are constantly changing.
The priorities
The same philosophy also explains the government's choices regarding priorities. From the needs that had been put on the table, diesel and heating oil were selected, based on the available funds, which, as the prime minister himself has announced, will move below 1.75 euros per liter, where it closed last year.
Behind the individual decisions there is a broader government line: support for income, without a return to a logic of fiscal loosening. At the Maximos Mansion they consider that the approximately 4 billion euros in permanent interventions that have been announced at the last two Thessaloniki International Fairs already constitute a significant support base, with income increases, tax relief and permanent support measures.
The argument put forward to the opposition is that a “give it all now” policy, without prior costing, would limit the country's ability to react to any new deterioration of the international crisis. As competent sources mention, the government wants to avoid the possibility of a global crisis turning into a new national fiscal dead end.
That is why the choice of gradual measures is not only economic, but also political. The Maximos Mansion and the economic staff want to show that they “hear” the… pressure created by the cost of living, without however committing from now the totality of the available resources. Each new intervention will be “measured” on the basis of the budget's endurance and developments in international markets.
For the time being, however, no “light at the end of the tunnel” is visible…