Expansion of Public Investments Program
This year’s Public Investments Program is being expanded by 900 million euros, with the submission of a supplementary budget at the beginning of October, in order to pay for infrastructure projects, including for the restoration of damage in Thessaly and to speed up the European Union-funded National Strategic Reference Framework (NSRF) projects.
As Minister of National Economy and Finance Kostis Hatzidakis and his deputy Nikos Papathanasis announced on Monday at a press conference, the total amount of the program will therefore reach €13.1 billion, from the €12.2 billion foreseen in the budget.
Some €600 million of the increase will concern the national part of the program and €300 million will go into the one co-financed by EU resources. As far as the national part is concerned, it will be financed to a large extent from the excess of tax revenues, as it emerged from the budget execution data, while the extraordinary levy on refineries will contribute €60 million to cover it. EU resources will contribute to the co-financing.
With this reinforcement of the program, ministry sources report, the limit of increase in budget expenditures, 2.6%, which the European Commission had set for Greece, will be used up. In other words, there is no scope for further spending.
However, because the revenue overshoot is significant, the ministry is reportedly forecasting an overshoot of the primary surplus target of the budget. From the budgeted 2.1% of gross domestic product, it is likely to reach 2.4% of GDP. The exact amount will be included in the Medium-Term Financial Structural Program, for which the negotiation with the Commission is expected to be completed next week.
Hatzidakis argued on Monday that the additional revenues come from the development of the economy and the fight against tax evasion. He has previously pointed out that this overshoot far outstrips inflation.
The Public Investments Program will continue to grow at an annual rate of 10-17% in the two years 2024-26, Papathanasis said.
Hatzidakis also announced that the application for the extension of the Hercules program by €1 billion euros has been submitted to the European Commission and is expected to be accepted. With this, the bad loans of the systemic banks will come down to the EU average.
