The government is running out of leeway to introduce any further support measures or tax breaks, following last week’s statements by the European Commission about the extension of the general escape clause – but only with special prudence for overindebted countries.
The government’s plans currently follow a two-pronged policy: further measures for tackling energy hikes this year, focusing on the fuel subsidy after June, and more tax breaks for 2023, with priority being put on the suspension of the solidarity levy for civil servants and also for pensioners. Given that 2023 will be an election year, the importance of that measure is obvious.
In theory any fiscal space provided for this year has been exhausted, though an improved performance from tourism and a possible easing of energy rates could create some extra leeway. Until then, the government will not be making any announcements.
The course of the May budget revenues will also offer a better picture, so that combined with the early data from the course of tourism in June, the government will be able to make any decisions, ahead of July, when the Commission is going to set each member-state’s fiscal targets for next year.