On Monday, the prime minister of Greece, Kyriakos Mitsotakis, announced a ten percent subsidy for every household’s food purchases to help counter the burden of inflation.
The funds from the subsidy are estimated at around 650 million euros ($690.82 million) and will be raised from a windfall tax on its two oil refineries.
As Greece enters the final stretch for the general elections scheduled to be held by June 2023, Mitsotakis hopes that the subsidy will win over voters who are increasingly concerned about their rising cost of living.
Starting “next February, the state will cover 10 percent of each household’s purchases for six months in supermarkets and food businesses,” including in bakeries, pastry shops, and fishmongers, the prime minister told Parliament before a vote on the 2023 state budget amid a pre-electoral atmosphere.
Individuals will receive a maximum of 220 euros. For large families with several beneficiaries, the overall amount will be capped at 1,000 euros.
The measure is for households with an income of no more than twenty-four thousand euros per couple, with an additional five thousand euros for each child.
Mitsotakis also said electricity and natural gas subsidies would remain in place.
“Without any fiscal cost, we will tax the refineries for 2022…to collect, we estimate, 650 million euros,” Finance Minister Christos Staikouras told state television ERT on Monday.
The subsidy program for household food expenses will be tabled in Parliament on Tuesday.
Subsidy in food included in Greece’s 2023 budget
The Greek Parliament has approved the country’s first budget in thirteen years not to be drafted under the supervision of the country’s creditors.
The 2023 budget passed with a vote of 156-143 in the three hundred-member Parliament on Saturday evening.
The ruling center-right New Democracy was the only party to vote for it. In a separate vote, the socialists, the third-largest party, joined the ruling party to approve the defense budget.
The budget calls for a primary surplus—excluding the servicing of the country’s debt—and forecasts that growth will slow to 1.8 percent in 2023 from 5.6 percent this year, as the economy rebounded strongly from a recession caused by the coronavirus pandemic.
Inflation is expected to average five percent in 2023 from 9.7 percent this year.
The inflation rate in Greece in October fell to 9.5 percent, below the EU average, which hit a record high of 10.6 percent.
The rate in Greece had risen to 12 percent in September, up from 11.4 percent in August and 11.6 percent in July.