**Mitsotakis to Unveil €2 Billion in Tax Breaks and Pay Rises Amid Cost-of-Living Pressures**
Greek Prime Minister Kyriakos Mitsotakis is poised to announce a substantial economic relief package exceeding €2 billion, aimed at addressing the rising cost of living and bolstering public support ahead of the upcoming elections in 2024. The announcement is scheduled for Saturday during Mitsotakis' annual economic policy speech.
The proposed measures, which represent approximately 1% of Greece's GDP, are designed to benefit a wide range of social groups and include pension increases, a rise in the minimum wage, tax breaks for self-employed individuals and small businesses, as well as support for the agricultural sector. According to three government officials familiar with the plan, the initiative seeks to alleviate financial pressures on citizens without jeopardizing the country’s fiscal stability.
The Greek economy has shown resilience, currently expanding at an annual rate of 2%, surpassing the euro zone average. Furthermore, the government anticipates a primary budget surplus of around 4% of GDP this year, nearly double its initial projections. This improved fiscal outlook provides the necessary leeway to implement the proposed relief measures, which are expected to take effect in 2026 and 2027. Some tax reductions will extend over a four-year period, offering sustained financial relief.
Despite these positive economic indicators, challenges remain. Unemployment in Greece stands at 7.9%, notably higher than the EU average of 6.1%. Additionally, GDP per capita in purchasing power remains among the lowest in the European Union. Data from the Labor Ministry indicates that the average monthly income has stagnated at €1,500, a figure echoing pre-crisis levels from 2009, while the costs of essential goods, including food, energy, and housing, have surged by at least 30% since that time.
The announcement comes at a time when farmers and labor unions are voicing their concerns over economic conditions. In December, thousands of farmers protested against low product prices, high energy costs, and a recent scandal involving agricultural aid that resulted in political resignations and significant EU penalties. Labor unions are also mobilizing, planning demonstrations in Thessaloniki on Saturday evening, advocating for more substantial wage increases and lower prices for everyday necessities and energy.
Mitsotakis' center-right government, which secured re-election with 40.5% of the vote in 2023, currently maintains a lead in opinion polls. However, the government is keenly aware of the need to strengthen its support base as it navigates the complexities of economic recovery and public sentiment.
As the Prime Minister prepares to unveil these significant economic measures, the focus will be on how effectively they can address the pressing financial challenges faced by many Greeks while ensuring the country's fiscal health remains intact. The upcoming announcement is anticipated to set the tone for the government's economic strategy as it approaches the next electoral cycle.