ATHENS – Prime Minister Kyriakos Mitsotakis’ New Democracy government is stepping up state aid ahead of spring elections, handing out 800 million euros ($856.76 million) in benefits to pensioners, farmers and businesses most affected by inflation and soaring energy bills.
The Conservatives government has spent more than 40 billion euros ($42.84 billion) in relief packages since the COVID-19 pandemic struck in 2020, including propping up households staggered by electricity bills that doubled.
A 7.75 percent raise for most pensioners was implemented in January and the government said it would give one-time bonuses up to 300 euros ($321.28) to those who didn’t qualify because of a curious loophole that found those with monthly benefits of 800-1000 euros ($856.76-$1070.95) left out.
Nearly half of the country’s pensioners did not benefit from the raise because they did not meet the original criteria, said Reuters, creating a dilemma for the government that didn’t want to see them alienated ahead of the polls.
Finance Minister Christos Staikouras said in televised comments that there would also be a temporary reduction in sales tax for transport, coffee and non-alcoholic beverages would be extended for six months until the end of the year, but the government won’t reduce a 24 percent Value Added Tax (VAT) on food despite prices still soaring as inflation eases.
“The measure aims to support businesses, as those sectors, have been particularly hit by the financial impact of the pandemic and have still had increased operating costs, due to the energy crisis,” he said.
The economy grew 5.6 percent in 2022 on the back of tourism as the Coronavirus waned and for 2023 it’s expected to increase another 1.8 percent and see a primary surplus of 0.7 percent of Gross Domestic Product (GDP.)
Higher-than-expected budget revenues in 2022 and a positive economic performance means the new aid package will not jeopardize the country’s fiscal targets, Staikouras said.
Greek farmers will also get tax refunds for their transport fuel costs for 2023 and will benefit from a quicker disbursement of outstanding compensations for natural disasters, the news agency said.