NEWS

Gov’t in search of funds for 'socially minded agenda'

TAGS: Finance

In its much touted effort to pursue what it describes as a more socially minded agenda, the government is mulling a plan to grant higher benefits for families with one or two children, but its implementation will depend on the cost-saving margin of other sectors.

These costs will be estimated in the ongoing budget spending review.

The plan will also depend on getting ministers on board to cut from their own budgets, in order to make it financially feasible for the government to grant these higher allowances.

The opinion backed by the government is that it is irrational to give a family with one child 480 euros a year and a two-child family 960 euros, when the allowance for a family with three children is much higher at 2,960 euros.

Given that the birth rate in Greece is at 1.3 percent, the logical thing to do, the government’s economic staff says, is to place more emphasis on two-child families.

The aim is, ultimately, to increase the budget by a few dozen million euros in order to help families by providing bigger allowances.

The government has also been presented with an alternative solution by the World Bank, which stipulates a reduction in benefits for families with three or more children so as to boost funds for one- or two-child families.

However, the prevailing view at the Finance Ministry is that the overall budget for family allowances should be boosted, on the condition that the spending review allows it.

The spending review is an exercise that began as a pilot program in 2016 at two ministries and then spread to the whole public sector.

Out of 5 to 5.5 billion euros allocated for operating expenses, the government wants to redistribute 350 to 400 million.

The initial aim was to redistribute around 10 percent of the total sum – 500-550 million euros – but the amount was reviewed downward.

However, even the revised target is difficult for the Finance Ministry to achieve, as sources say that several ministers are unwilling to make cuts to their own budgets.

Kathimerini also understands that Interior Minister Panos Skourletis is not over the moon about contributing from his budget.

If the spending review does not produce the funds to increase the benefits, then sources say that “cuts will be made elsewhere.” 

Finance officials also want the spending review to give the government scope to pursue a plan to increase housing benefits, and to offset the reduction of the heating allowance from 110 to 55 million euros.

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