Greek FM to ot.gr in Davos: Fiscal space will allow for more support measures in 2023

Greek Finance Minister Christos Staikouras said the center-right government will continue to subsidize certain categories of power bills in the country, in statements to Mega TV and ot.gr on Wednesday on the sidelines of the ongoing Davos World Economic Forum in Switzerland.

Ameliorating surging energy prices and their negative effect on inflation has been a priority for the Mitsotakis government in Athens, with a general election this year also adding to the urgency.

According to Staikouras, the government will continue its “generous” support primarily to households but also to businesses, aiming to cover the additional burden from skyrocketing electricity rates – which in Greece were drastically affected by unprecedented increases in natural gas prices.

He also said positive results were achieved without a “great fiscal cost”.

Moreover, Staikouras revealed yet another possible “pivot” away from a traditional conservative fiscal policy, by leaving open the possibility of more future subsidies and support measures, “if fiscal space emerges, and as long as fiscal space is created.”

“I estimate that as long as the Greek economy is performing as it is today, and as we’re expecting it to perform, then fiscal space will be created in 2023 … Greece in 2022 spent 20.3 percent of GDP to support society (via newly announced extraordinary welfare spending), when the European average was 1.3 percent.”