The risk of higher electricity bills and more expensive fuel together with soaring food prices are three factors that have sounded the alarm to the government.
Three ministries – National Economy and Finance, Development and Energy – are preparing interventions to contain pressure on households, especially on vulnerable households. The battle against high prices has different characteristics this year than last year for three reasons.
- First, the economic staff had much larger fiscal margins last year than the current year to support any measures as there was no obligation to produce high primary surpluses. Achieving a balanced budget at the primary level in 2022 was considered a success. This year, however, a primary surplus of more than 1.1% must be produced to pave the way for additional support measures, while for 2024 the budget is squeezed even further by the target of a primary surplus of 2.1%, or about 5 billion euros.
- Secondly, the European Commission as well as the Eurogroup have instructed member states to avoid horizontal support measures altogether, which will soon have an impact on consumers, especially in terms of electricity bills.
- Thirdly, the tension in the Middle East has been added to the “open fronts” that were not closed (eg war in Ukraine) last year.
