The Finance Ministry is putting a cap on coronavirus benefits, as the state cash reserves are fast shrinking and will only suffice up until the end of June, ministry sources say. They add that the coming weeks will see a tightening of fiscal policy so as to avoid having to resort to the cash buffer of the European Stability Mechanism, whose disbursement requires terms that have yet to be determined.
The government will exempt civil servants and pensioners from tax breaks, and if the support to workers is to be continued, it will be granted based on the days of their contract suspension.
There will also be no renewal of the tax and social security obligation suspension beyond August 31, which will only concern those already included in the measures announced.
Government policy will from now until the gradual resumption of economic activity be focused on measures aimed mainly at supporting corporations, and not so much employees, as the aim is to strengthen enterprises and avoid new contract suspensions (which are a drain on the budget) as well as layoffs.
“Our aim is to get to the end of the crisis with the cash reserves we have today, combined with the cash buffer, and in any case we will not be the first to utilize the ESM resources,” says a senior Finance Ministry officer. After all, Greece’s share from the new ESM resources is very small, at just 3.7 billion euros, while the crisis is costing the state 5 billion euros a month.
The ministry is changing the way the handouts are distributed, taking into account the days of each worker’s contract suspension.
To date the cash was credited regardless of the suspension period, so in May (if the measure continues to apply) it will amount to 532 euros for the entire month’s suspension, but only to 177 euros for a 10-day suspension, and 354 euros for 20 days.
The same official further noted that the next measures, possibly concerning reductions to income tax and the Single Property Tax (ENFIA), will be targeted, and will definitely exclude civil servants and pensioners.