At a time when the Ministry of Finance declares that “the resilience of the Greek economy and the stable fiscal policy led to the achievement of the fiscal targets for the year 2023”, on the occasion of the announcement by ELSTAT of the data on the primary surplus, the opposition parties unleash group “fires” at the government and accuse it of galloping accuracy and “tax-inducing” policy.
In particular, according to ELSTAT’s first estimate, the primary surplus at the end of 2023 was higher than the target, as it reached 4.01 billion euros or 1.9% of GDP, when in 2022 it was at zero.
According to Eurostat data, in March Greece had the second highest food inflation among Eurozone member countries
At the same time, the GDP in 2023 increased to 220.3 billion euros against 206.6 billion euros in 2022 and 181.5 billion euros in 2021, while the Greek debt fell to 356.7 billion euros at the end of the year, against 356.8 billion euros in 2022.
Taxes and… investment grade the reason
However, while the Ministry of Finance is celebrating by analyzing the benefits for the Greek economy from the primary surplus of 2023, the fact is that the reason for this “blue” success is that the government took a decisive – for the citizens – decision.
After weighing, on the one hand, benefits and support measures where around 900 million euros could be channeled and, on the other hand, the fiscal stability that would lead the Greek economy on the road to investment grade, the government leaned towards the grade and decided that this money should not be channeled back into society, but should remain in the “piggy bank” of primary surplus.
As for how exactly a higher-than-target primary surplus came about, it’s simple: with… heavy taxes.
Specifically, it is 4.5 billion euros, which came, according to the budget data as follows:
- 1 billion euros in addition to VAT collections. The 500 million euros are related to the increase in consumption, the 300 million euros come from the increase in tourism and about 200 million euros come from inflation due to accuracy.
- €1 billion more from personal income tax due to increased incomes.
- 2.1 billion euros in addition to corporate income tax.
- Another 400 million euros from are other sources.
What does the government say?
According to the Ministry of Economy, “this positive result proves the dynamics of the Greek economy, but also the gradual benefits from the reduction of tax evasion” and it indicates indicatively that, in the months of January and February 2024, “the 397 million euros, out of 647 million euros which was the exceeding of the objectives, came from the payment of income tax of legal entities”.
As he claims, in fact, exceeding the target regarding the primary surplus has a reflection in four areas:
“First, to the faster reduction of the public debt. Second, to create a better starting point for achieving the fiscal goals of 2024. Third, to create more margins of flexibility regarding the country’s 4-year fiscal planning, due to debt containment. And fourthly, this result sends a strong signal to the international markets that the Greek economy is strengthening and growing beyond the targets, despite the difficulties and extraordinary events that the country has faced (natural disasters, international crises, double national elections, etc.) during the previous year”.
What does reality answer her?
The continued precision that affects households, however, remains despite the government’s subsidy policies with the various “baskets” and “Skreka measures”, which is reflected in the fact that even the Easter consumption habits of Greeks are now changing.
Research by the Consumer Goods Retail Research Institute shows a downward trend in spending, with travel the first sector to be hit.
Even eating habits do not escape the vise of precision, with the research highlighting smaller family tables, but also more cooking and confectionery preparations at home.
According to the breakdown of the harmonized index of consumer prices published by Eurostat, Greece had the second highest food inflation among the Eurozone member countries in March.
Pappas: The data on the surplus prove the lie of the government
ELSTAT’s announcements on the primary surpluses were commented on by the head of Finance and Economy of K.O. of SYRIZA, Nikos Pappas, accusing the government of “lying” about reducing his taxes.
As he characteristically said, “it turns out that there is a big hoax, a huge lie on the part of the government, which said it was reducing taxes”.
And he explained that, “in 2022, we had a record of taxes as a percentage of GDP, and this was certainly reflected because for the years 2022 and 2023 we have around 4 billion surpluses, that is, money collected in the treasury of the state above the fiscal target” .
He pointed out, in fact, that during the SYRIZA government, “a large part of the surplus was returned to society – and we were then accused of ‘wastes'”, to add that “Mr. Mitsotakis has made it clear that he will not do this”.
Nikos Pappas brought back Koumoundourou’s proposal to combat exactitude, which consists in using part of the surplus profits “to reduce indirect taxes, so that there is a decompression in the basic prices”.
Androulakis: Accuracy undermines the everyday life of the people
The president of PASOK, Nikos Androulakis, was on Tuesday at the “leave” – as he characteristically said – Varvakeio Agora, where he had the opportunity to talk with professionals and citizens.
“Yesterday, the prime minister, visiting the Rentis market, described to us how well it is doing with precision. How well it is doing, the Greek people are experiencing in their pockets. Eurostat’s figures are revealing. In March, as you will see, the growth rate of food inflation in Greece was more than four times higher than the average of the European Union”, stressed Mr. Androulakis.
And he noted that the accuracy, housing costs and the situation in the National Health System “undermine the everyday life of the Greek people”.
That is why, as he mentioned, “political stability is not judged in the European elections of June 9 (as the Prime Minister “threatens” us). The arrogance of the government, which despises the real problems of the citizens, is being judged.”
KKE: The monstrous surplus is the other side of tax evasion and precision
The KKE talks about “bloody surpluses” that will be maintained in the coming years, noting that the monstrous surplus, amounting to 4 billion, far above even the forecasts, announced for 2023, is the other side of tax evasion and accuracy , which crushes the people’s income, but also of the ‘money trees that don’t exist’, when it comes to the satisfaction of social needs”.
As he states, “despite the government celebrations, the people will not benefit from these ‘successes’ in any way, not even with some ‘crumbs’ as was done in the past”, while he argues that “those who are ‘rubbing their hands’ are the big business conglomerates, who will continue to enjoy tax breaks and fat subsidies, and crow lenders with early repayments.”
Tags: Government celebrates primary surplus Precision surplus Opposition
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