The issue of household support comes back for the government, before the package of measures already announced is properly activated.
Energy prices are skyrocketing and Europe is reluctant to loosen up the fiscal straps a bit in order to create additional fiscal space.
The week begins with the price of unleaded being formed at the highest levels since the outbreak of war, both at wholesale and pump level. This means that the chances of maintaining inflation above 5% for another month are sufficiently high, as only deescalation of the price of fuel oil is not enough to reverse the situation. So as we move towards a new record at the pump, at least for the unleaded (but concerning a larger number of drivers), the financial staff are asked to decide within the next 24 hours whether to «touch» and the last reserve for funding support measures, currently containing EUR 200 million. By the end of the month, it should be announced whether or not the subsidy on fuel oil will be extended:
(a) If it is not extended, the annual change in traffic oil prices for June (and if nothing changes with the situation on international markets) will reach... 37%, out of 24% that it is now, with what this means for June inflation.
(b) If the subsidy is extended, from EUR 200 million of «gourd» At least EUR 50 million will be left and without hope that money will be considered in the future not to be included in the financial account of «net expenditure» This is because the subsidy on diesel is a horizontal and universal measure.
At the last minute
Competent government officials insist that decisions will be taken literally at the last minute, as the latest available data must be taken into account (p.: extension to the subsidy of travel oil can be done by simple ministerial decision, no further legislative intervention is needed). Why so cautious?
1. Firstly, because even today, the majority in the Eurogroup is against budgetary relaxation. Although inflation has hit the entire Eurozone and the ECB is ready to announce interest rate increases even in June, the prevailing logic is to «protected» the yields of the bonds. The Middle East war has raised lending costs for all of Europe (Germany above 3%, Italy at 4%, France at close to 3.8%, etc.) and since hundreds of billion euros of the largest European economies have been planned, it is necessary not to create a feeling of concern on the markets, even if a blow is already recorded in the European citizen's income.
2. Secondly, because even if Eurogroup sends a signal «targeted relaxation», this will concern support measures with criteria, exceptional and one-off. The subsidy on diesel fuel does not belong to this category, so the financial staff are concerned about insisting on a measure that cannot be passed under the «radar» of the European Commission.
3. Thirdly, because we are still in May and the EUR 200 million left in the Fund will prove inadequate if there is an extension of the crisis, which now appears to be a possible scenario. The financial staff do not want to violate the financial rules - as they have already done at least 10 countries - as ICU September is close. The main issue remains to plan and implement permanent measures for the following year. Violation of budgetary rules this year will not help in this direction. It has already come to an end of EUR 1 billion for additional aid measures in 2027, and the point is to preserve and share with the citizens with the change of time.
For traffic oil, all scenarios are on the table right now. From extending the subsidy as it stands, until it is limited to lower levels (e.g. 10 minutes per litre instead of 20). Everything will depend on oil prices. At present, with the barrel at $19, petrol being sold 22% more expensive than last year, the petrol of 24% and the diesel of 34%, there does not seem to be much room for manoeuvre and protection of «cushion» EUR 200 million. However, the possibility of a new fuel pass has already been removed, as the EUR 130 million required is deemed not to exist.
«Gazi» for the EUR 500 million package
For the financial staff it is necessary to step on the gas to implement in practice the measures announced at the beginning of April, amounting to EUR 500 million. The relevant bill is given to public consultation immediately and will remain in this regime for 15 days. The measures and the adoption of implementing decisions are then required. The priorities are as follows:
1. Pay the child allowance (EUR 150 per child) by the end of June or at the latest early July, as it alone is half the support package, with a budget of EUR 240 million.
2. To open by the end of the month the platform for farmers' applications in order to be subsidized for fertilisers and to get the money at least for the period from 15 March to the end of April.
3. Start the 72-dose and expanded extrajudicial arrangements with the accession and debtors with debts of more than 5,000 euros.
preferred source on Google
To show more articles by Maritime in your searches easily and quickly, you must add the site to your preferred sources. You can do it by going Here..
