Cost of government's handouts exceeds fiscal leeway

The government handouts announced last week extend beyond the fiscal leeway allowed by the 2019 budget, according to a report by the State General Accounting Office that is attached to the relevant amendment tabled on Monday.

The interventions on value-added tax and on pensions amount to 1.27 billion euros, while the primary surplus overrun, according to the government, amounts to 1.14 billion euros. The costs may actually expand further, as the Accounting Office has been asked to assess the cost of a possible VAT rate cut on coffee too, both in service and in retail sale, as it currently remains in the highest VAT bracket of 24 percent.

Therefore, not only is the government removing the safety cushion for 2019 that would have been set aside for any unforeseeable circumstances, but there is an excess in costs over the fiscal leeway that amounts to 0.6 percent of gross...

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