Govt announces eight measures to combat rising costs amid Middle East war

The government on Thursday announced a €200 million package of eight measures which it hopes will help combat rising costs after four weeks of war in the Middle East.

Firstly, the reduced five-per-cent rate of value added tax on electricity will be extended until May next year, having initially been expected to expire in May this year, while the fuel consumption tax will be reduced by 8.33 cents per litre between April and June.

The rate of VAT on meat, poultry and fish will be zeroed between April and September, while “green taxes” on fuel, which had been set to raise the retail price of fuel by nine cents per litre, will not be implemented.

The government will also offer to cover 30 per cent of the wages of all workers in the hotel sector during the month of April, and will draw up a “special plan for more support for airlines to secure the seamless connectivity of the country with important destinations for the attraction of tourists”.

Additionally, the government will subsidise 15 per cent of the cost of all fertiliser and agricultural supplies for farmers in April and May. The subsidies for farmers are counted as two separate measures.

In announcing the measures, President Nikos Christodoulides said that it was the otherwise sound state of the island’s economy which allowed the government to roll the eight measures out.

“It is of decisive importance that due to our responsible policy, the economy of our country is strong and resilient and allows us to intervene effectively, for the benefit of the public and for society,” he said.

He added that the island’s “high growth rates”, a “significant fiscal surplus”, and “limited public debt” allow the government to “optimally manage the impacts of regional developments and strengthen the ability of our economy to face external shocks”.

These positive characteristics, he said, are the result of the government’s “responsible economic policy”.

“From the very beginning, our government acted with responsibility and with a plan, both in terms of initiatives for stability in the region and in terms of support for society,” he said, adding that the government “utilised every available tool … in terms of providing substantial support to society, citizens, and businesses”.

He stressed that “economic stability is national security”, and that “in times of challenges, responsible policy is the strongest guarantee for society”.

“I truly hope that the international initiatives which are underway will soon lead to de-escalation. At the same time, however, and precisely because we must continue to be serious and responsible, in our plans, we are also taking into account the scenario that the crisis may last,” he said.

He added that for this reason, the government is “proceeding methodically and with a plan, so that the support is substantial”, with “temporary and tailored measures” to ease rising costs brought about by the outbreak of the conflict.

On the matter of the eight measures, he said that they are “fully costed and within budget surpluses”.

He also sent a warning to those tempted to profiteer out of the current crisis.

“We stand by every household and every business, with actions and with projects. In this context, the functioning of the market is being systematically monitored. I want to be categorical. Any profiteering will not be tolerated. Strict instructions have already been issued to intensify checks to ensure consumer protection in practice,” he said.