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23 May, 2024
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Finance Ministry to shield vulnerable homes from price hikes

Support package will offer relief to struggling families

Panayiotis Rougalas

Panayiotis Rougalas

The forthcoming measures are set to target specific areas, not just spread thinly across the board, in the fight against rising prices. Though the exact timing of their announcement, whether immediately after Thursday's emergency Cabinet session, remains uncertain, one thing is clear: the Ministry of Finance intends to adhere closely to the Commission's directives, avoiding broad, sweeping actions.

Notably, President Nikos Christodoulides called for an urgent Cabinet meeting on Thursday morning at 11:15.

In a succinct statement to "K", Finance Minister Makis Keravnos hinted at the focused nature of these upcoming measures, aimed at bolstering households against the tide of inflation. In his explanation, he emphasized their targeted approach, designed to offer assistance where it's most needed.

According to the Commission's guidelines, these measures are expected to prioritize support for vulnerable households and businesses, steering clear of one-size-fits-all solutions. While countries are not restricted from continuing aid to combat inflation, there's a cautionary note regarding fiscal prudence, discouraging excessive spending that could exacerbate economic imbalances caused by the pandemic, conflicts, and inflationary pressures.

This directive from the Commission has been in place since late 2022, when energy demands surged to the top of the agenda. The Commission's stance underscores the importance of a balanced approach, advocating for targeted assistance tailored to the needs of the most vulnerable segments of society.

Looking back, in October 2023, President Christodoulides unveiled a comprehensive support package totaling €196 million. This package included escalating subsidies to offset rising electricity costs, reductions in fuel consumption taxes, zero VAT rates on essential goods, extensions of allowances, and one-time assistance for vulnerable citizens. Additionally, medium-term measures were outlined, aimed at finding sustainable solutions to reduce energy costs and ensure accessible housing options.

Fast forward to late February, where the continuation of these measures was practically assured. Extensions were granted for escalating electricity subsidies until April 30, 2024, covering residential, commercial, and industrial consumers. Vulnerable consumers would benefit from subsidies covering 100% of electricity price increases. The reduction in fuel consumption taxes was extended until March 31, 2024, and one-time support was provided to households receiving relevant allowances from the Ministry of Social Welfare, based on income criteria.

The February package of measures, estimated at €60 million, reflects a commitment to targeted assistance, ensuring that resources are directed where they are needed most, without losing sight of the broader economic context.

[This article was translated from its Greek original]

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