ATHENS – Greece is waiting for the initiatives of the European Commission, which may create additional fiscal space, and for a clearer picture to emerge regarding the energy crisis, the war in Ukraine and the level of state revenues, before it decides on a net of support measures against the latest crisis, Finance Minister Christos Staikouras said on Friday to the radio station “Parapolitika”.
He urged calm and prudence, noting that it may be days or even weeks before a clear picture starts to emerge.
Staikouras noted a change in the EU position as regards the exceptions or special handling of defence spending at the last Ecofin Council, noting that this created much greater margins for the support of businesses and households. He also reported a shift as regards a Greek demand to give additional support to energy-hungry enterprises, which had previously been refused.
The minister noted that uncertainty had multiplied and that government policy must focus on targeted support but for a much greater period than originally predicted and for a problem that would be far more intense.
Staikouras noted that the measures taken during the pandemic led to a primary deficit exceeding 6 pct of GDP, while the cost of borrowing was higher and debt had also increased.
“Therefore, any flexibility given must be used wisely,” he emphasised.
The minister said that the crisis would affect growth by one percentage point and warned of impacts on the price of grains and some metals, while natural gas prices will remain high throughout 2022 and inflation in Europe will exceed 5 pct. He appeared confident, however, that Greece’s cash reserves were sufficient to meet the needs of this period while stressing the need to accelerate the recovery fund.