Strict spending limits ahead

The new medium-term fiscal structural plan being negotiated with the European Commission will set strict spending increase limits from 2025-2028.

This will limit the government's ability to dole out handouts, which were largely used these past two years to deal with the effects of global crises, but which, in less turbulent times, target specific constituencies in a bid for their votes.

Although the final plan will not be agreed upon until September or October, at the latest, the Commission has already provided guidance for the spending increase targets it wants: 3% in 2025, 3.1%-3.2% in 2026 and 2027 and 3% in 2028. Negotiations between the Commission and the Ministry of Finance are not expected to change those targets by much.

Not included in the Commission's restriction is spending on debt service and on investment projects jointly financed with the EU.

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