Some space for more support?
Around February 20 the government will launch the Market Pass platform for the food purchase allowance, while the low international rates of natural gas may give the government some fiscal room for another pre-election handout, as the electricity rate subsidy will be reduced.
The price of natural gas has reached pre-war levels at 75 euros per megawatt-hour, while the budget has been drawn up assuming a price of €120/MWh. However, as officials at the Finance Ministry point out, it will be necessary to have this rate maintained for a long time in order for it to be translated into a reduction in the tariff subsidy.
If that proves to be the case, part of the budget’s €1 billion reserve, earmarked to support household and business electricity tariffs, will potentially be released.
For now, however, the same sources point out that the reserve will be used to pay for the Market Pass, since the taxation of refineries, from which the measure will be financed, will not be collected before July, with corporate income taxation. It is recalled that the tax on the profits of refineries concerns 2022 and their tax declaration will be made in June.
At the same time, significant subsidies have already been launched and are being added to the incomes of workers and pensioners.
In the Ministry of Finance, officials want to avoid any more promises on provisioning, as the six-monthly visit of the institutions is expected in March as part of the simple post-program supervision, while a series of rating agency assessments are imminent, in which the government is hoping to see the country’s credit rating being restored to investment grade. Fitch Ratings will come first on January 27, followed by DBRS Morningstar on March 10, Moody’s on March 17 and Standard & Poor’s on April 21.
Meanwhile, the minimum wage is estimated to rise to at least €751 per month from April 1, one month earlier than planned, with the Labor Ministry preparing the new timetable in order to start and speed up the consultation procedure with the social partners, scientific institutes and agencies.
