But officials of the Ministry of National Economy point out that this does not mean the creation of additional fiscal space
The Ministry of National Economy and Finance is positively facing the proposal of the European Commission President, Ursula von der Layen, to activate the escape clause for defense spending in relation to the implementation of European fiscal rules.
This means that defense spending will be excluded from debt and deficit count so that the treaty does not need to be changed. To this end, the Minister of National Economy and Finance, Kostis Hatzidakis, said last Tuesday from Brussels that “these initiatives shield our defense capacity and send a clear message to those who threaten our safety. And they must be adopted without delay. “
However, as the Ministry officials explain to RES, the adoption of such a proposal will in no way create additional fiscal space, which can be used for example. Extra social benefits. “It will be possible in this case,” they point out, “if they increase e.g. Defense spending for 2024 from € 1.1 billion to € 1.4 billion, this increase is accepted, without having to cut other expenses.
Of course, it will be a “breath” in the budget, always carefully not affecting the primary surplus and debt. ” While other government officials say the country can benefit from the proposal of the President of the Commission because of its geopolitical position and the need for increased equipment.
What is not known by the announcement of Ursula von der Laien is the terms and conditions for a Member State to exceed the limits for defense spending. To determine these, there will probably be a large “bazaar”, either within the Eurogroup or in bilateral leaders’ contacts. The issue is reportedly expected to be discussed at the March Spring Summit and ultimately decide whether the new terms will relate to each Member State separately or in groups of states.
Today, budgetary rules focus on the rate of net growth (after deducting revenue and expenditure on co -financed projects, as well as emergency one -off costs for natural disasters) primary (excluding expenditure costs).
Especially for Greece, the rate of increase in net primary expenditure is 3.7% for 2025 (about 3.5 billion euros), 3.6% in 2026, 3.1% in 2027 and 3% in 2028. With today’s data, if the country wishes to spend additional eg. EUR 1 billion from the € 3.5 billion threshold, then the additional amount should be found: either by the imposition of new taxes or increased existing or from revenue on a permanent basis that will have the same power.
These revenue may result from either the rise of GDP, or from other sources such as tax evasion. And as a half unit of growth from growth from growth requires 5%GDP rise, as Mr Hadjidakis has repeatedly stated, the heavy burden is thrown into the disclosure of taxable material and the fight against tax evasion and tax evasion.
