Finance Ministry believes fiscal gap will be covered

The fiscal gap that has been dogging the 2020 state budget is closing, Finance Ministry officials say, arguing that the difference, currently estimated at 500 million euros, will have been bridged by October 15.

According to a top ministry official, “when the creditors’ mission chiefs left there was a gap [of about 900 million euros], but additional interventions and discussions have taken place, and we are now convinced there will eventually be no gap.”

The ministry estimates that the target for a primary surplus equal to 3.5 percent of gross domestic product will be achieved, although this does not factor in any impact from yesterday’s decisions by the Council of State on pensions. The same official avoided questions on that matter, saying the verdicts of the country’s highest administrative court have to be studied first and will probably not be included in the first draft of the 2020 budget to be tabled on Monday in Parliament.

Discussions on covering the fiscal gap continue at a staff level, and government sources say additional decisions have been made to cover the difference; they include the expansion of the tax base by increasing online transaction requirements (which should contain tax evasion), the rise in revenues from the Single Property Tax (ENFIA) by 500 million euros (thanks to the inclusion of an extra 7,000 areas in the objective values system), the planned spending review (although that is not expected to fetch any impressive results), and the debt repayment mechanism (regarding which the latest data show the inclusion of arrears adding up to 8 billion euros).