Parliamentary Budget Office against horizontal measures
The Parliamentary Budget Office spoke on Thursday in favor of targeted support measures as opposed to horizontal ones, with its head Franciscos Koutentakis clarifying once again he does not consider a reduction of the Special Consumption Tax on fuel appropriate.
The general secretary of fiscal policy under the former SYRIZA government confirmed the position of the PBO on the need to implement a prudent fiscal policy, as the conditions of uncertainty internationally, as well as the country’s weak position due to its high debt, do not allow for any other option.
“Fiscal constraints do not arise from political decisions, but from the conditions of public debt sustainability,” the Parliamentary Budget Office’s quarterly report said on Thursday.
“In the current conditions, there is no room for generalized interventions – such as those during the pandemic – as they would threaten the already fragile fiscal balance and make our country vulnerable to any kind of disturbance,” the PBO warned.
It added that “any income support measures should be temporary, targeted and financed by additional current revenues, so as not to burden the public debt.” In this context, the Parliamentary Budget Office is in favor of recent decisions on the taxation of extraordinary profits of suppliers and the imposition of a ceiling on the wholesale prices of electricity from July. It noted that this signaled a change of direction, transferring part of the cost of interventions to electricity producers. In contrast, the previous interventions shifted the costs exclusively to the state – i.e. the consistent taxpayers, present and future – the report pointed out.
Regarding the proposal to reduce the Special Consumption Tax on fuel, Koutentakis left no doubts as to whether he is opposed to it, firstly because it comes at a high fiscal cost, secondly because it is not targeted, but rather a horizontal measure, and thirdly because – in his personal opinion, as he explained – the priority at the moment is not gasoline, but electricity.
The PBO also acknowledged the high growth rate of 7% in the first quarter as a positive development, but predicted a slowdown in the second.
