- On 27 December the government approved a new package with 0% VAT on basic foods such as bread, milk, fruit and vegetables.
- It included a 200-euro cheque for low incomes and an end to the general fuel discount, which remained only for professionals.
- 2022 was the year inflation and interest rates returned: a good year-end reviews loans, contracts and cash before the new financial year.
On 27 December 2022 the government approved a new anti-crisis package: 0% VAT on basic foods such as bread, milk, fruit and vegetables, a 200-euro cheque for low incomes and an end to the general fuel discount, which remained only for professionals. It was the last major response of the year to rising prices, in a year marked by inflation and by rising interest rates.
Closing the year with a review of what happened helps to understand what has changed and what needs to be done differently. 2022 began with inflation at multi-decade highs, continued with a war that altered the energy map and ended with interest rates at levels not seen for years. For companies and families, the combination required adapting to an environment of rising costs, dearer financing and a great deal of uncertainty. The experience of the year invites a closer look at the items that weigh most in the budget and a periodic review of contracts.
What the package included
The package combined three different instruments: a tax cut, a direct payment and a change in fuel support. Each was aimed at a different recipient and therefore had a different effect on the budgets of families and professionals.
Each measure has a purpose. Zero VAT on basic foods seeks to ease the item that weighs most in the budget of lower-income families. The cheque directs help to households with the lowest income. And withdrawing the general fuel discount, keeping it only for professionals, concentrates support on those who depend on fuel for their activity. It is worth knowing the requirements of each. In the household budget, food is an item that cannot be postponed, so any relief in its price is felt immediately.
The year rates and inflation came back
2022 was the year inflation and interest rates returned. After a long time of stable prices and cheap money, families and companies had to adapt to an environment in which the cost of living and the cost of financing rose together.
That adaptation is not over. Variable-rate mortgage payments, the cost of company loans and the prices of many goods and services continued to reflect the changes of previous months. Understanding that the environment has changed lastingly, and not merely cyclically, is the first step towards planning realistically: what worked two years ago may not serve today, and what is decided now will have long-term effects. For companies, the consequences were higher energy, financing and staff costs, and the need to review prices more often.
Entering 2023 with room to manoeuvre
Those who entered 2023 with reviewed debt, updated contracts and sufficient liquidity had room to decide; those who did not had to react. A good year-end includes reviewing loans and their rates, supply and customer contracts, and available cash, before the new year imposes its own rhythms.
A simple checklist can help: calendar of rate reviews and debt maturities, energy and supply contracts, price-indexation clauses with customers and suppliers, next year’s budget with high financing costs as the base scenario and a liquidity reserve for the unexpected. An adviser can accompany this review, which saves surprises and lets the year begin with more peace of mind. And above all, to stay calm: planning ahead and with data is better than reacting to every piece of news.
An orderly year-end is the best way to start the next.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
