Government Introduces Offsetting Measures Amidst VAT Cut Expiry
In a strategic move to balance public sentiment, the Christodoulides government has orchestrated a series of offsetting measures to counteract the end of the VAT cut on car fuel. With the VAT cut set to expire on March 31, the administration faced growing discontent among citizens. To address this, an extraordinary council of ministers meeting was convened to announce new measures aimed at mitigating negative reactions.
The government’s approach has been to preempt criticism by introducing positive initiatives alongside less popular decisions. This tactic is seen as an effort to maintain favorable public opinion in the face of potential media and opposition backlash. Finance Minister Makis Keravnos revealed that the electricity bill subsidy, originally due to end in April, would now be extended for two additional months. This extension is projected to assist approximately 400,000 households and 100,000 businesses, with an estimated cost of €8 million. While the average household may save only €16 over this period, the gesture is positioned as a human-centered economic policy.
Additionally, Keravnos announced the prolongation of zero VAT on essential items like bread, vegetables, and baby food until the end of June. This measure, which could save consumers around 8 percent on a €100 shopping basket, is another attempt to demonstrate the government’s commitment to easing the financial burden on its citizens. The total cost for this extension is calculated at €6 million.
The package of offsetting measures also includes financial support for families receiving state benefits, individuals with mobility allowances, and low-income pensioners. The cumulative cost of these initiatives amounts to €35.3m, a figure that Keravnos assures is within the state’s financial capabilities. Despite these efforts, opposition parties remain critical, arguing that the middle class has been overlooked and advocating for an extension of the fuel price cut.
The Christodoulides government continues to emphasize its dedication to improving the lives of ordinary people. However, with some factions still unsatisfied, it appears that additional measures may be necessary to fully appease public opinion.