Government Implements Offsetting Measures to Balance Fuel VAT Decision
In the face of growing public discontent due to the termination of the VAT reduction on car fuel, the Christodoulides government has taken steps to mitigate the impact on its citizens. With the VAT cut set to end on March 31, the government, in a strategic move to maintain public favor, convened an extraordinary council of ministers meeting. The aim was to introduce well-received decisions that would counterbalance the anticipated negative reactions from both media and opposition parties.
Finance Minister Makis Keravnos announced a series of offsetting measures, including the extension of the electricity bill subsidy for an additional two months. This extension is expected to benefit approximately 400,000 households and 100,000 businesses, with a total cost of €8 million. While the average household may only save €16 over two months, the government positions this as a positive step towards easing the financial burden on its citizens.
Furthermore, Keravnos revealed that zero VAT on essential household items such as bread, vegetables, meat, milk, nappies, and baby food would be extended for another month until the end of June. This move, costing €6 million, is projected to save consumers around 8 percent on a €100 shopping basket. The government claims that these measures exemplify their human-centered economic and social policies.
In addition to these subsidies, the government will also provide pay-outs to families receiving state benefits, individuals with mobility allowances, and low-income pensioners. The total expenditure for these offsetting initiatives is estimated at €35.3 million, an amount that, according to Keravnos, the state finances can accommodate.
Despite these efforts, opposition parties remain critical, arguing that middle-class citizens have been overlooked and advocating for an extension of the fuel price cut. The government, however, stands by its measures as evidence of its commitment to improving the lives of ordinary people. With some still unsatisfied, it remains to be seen if further offsetting measures will be unveiled in the near future.
