Inflation “eats” all subsidies, a new package of support measures is on the way

The government’s finance apparatus wants to fill its quiver with new “arrows” to be able to defend itself against the inexorable rise in prices and the pressure caused by the surge in energy prices. Inflation “eats” subsidies, a new package of support measures is on the way.

An additional budget of 2 billion euros is already in the works, which was deemed necessary on the back of an upward price trend. In this situation, in addition to 2 billion euros, the financial headquarters is preparing to throw another 1 billion euros into battle, attracting money from the country’s treasury, writes dikaiologitika.gr.

The intention of the Greek authorities is to create the necessary support for the population so that they can cope with the heavy burden on their shoulders created by rising energy prices.

Forecasts show that the upward trend in prices will continue across the board. It is now considered highly likely that inflation will reach double digits in the next period, meaning that government interventions will have to be “on all fronts”.

A plan of compensatory measures is being considered, which relate to:

  1. Fuel subsidies in May.
  2. Preservation electricity subsidies in the coming months, with the issue of increasing the amount on electricity bills for households and businesses remaining open. There are proposals for full coverage of tariff increases for vulnerable households, which will not be horizontal, but based on income and property criteria.
  3. Additional assistance in the agricultural sector to cover the costs of fertilizers, animal feed, etc.
  4. Reduction of VAT rates from 13% to 6% on certain basic foodstuffs. The proposal remains open as several members of the finance staff believe that the ratio of budget expenditures to the effect such a measure would have on prices is negative. Therefore, for now, the decision is postponed.
  5. Extension until the end of 2022 of reduced VAT on catering, tourism and transport. The goal is not to burden the “tourist package” this season.
  6. Accelerating the disbursement of funds from community programs for grants to professionals and companies, as well as VAT refunds to increase liquidity in the market.



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