Additional spending of just €2.5 bln
The European Commission’s fiscal recommendations to member-states last week for 2024 introduced a key new criterion of fiscal discipline: the increase of net primary costs. That will be like a dress rehearsal ahead of the full implementation of the Stability Pact from 2025. For Greece, the spending growth limit for 2024 was set at 2.6% compared to 2023, which translates, according to Finance Ministry sources, into an increase in expenditure around 2.5 billion euros.
That amount may seem sizable, but it doesn’t allow for any new handouts. If a New Democracy government emerges from the June 25 ballot, it will be able to fund its 2024 program of €1.3 billion, leaving room for additional spending that is permanently there, due to inflation, fuel, etc. of €1 billion. It is understood the opposition SYRIZA program cannot be financed in this context.
Based on the ND program, for 2024 the main additional costs to be financed thanks to the margin of 2.6% will be the civil servant salary raise by €500 million and the pension hike estimated at €456 million, on the assumption that growth will be 2.3% and inflation 4.5%.
