Greek PM unveils plan to boost incomes ahead of elections
Greek PM Reveals Tax Breaks, Wage Hikes in €3.5B Economic Plan Pre-Elections
Key Measures and Economic Context
ATHENS, Sept 5 (Reuters) – Greek Prime Minister Kyriakos Mitsotakis on Saturday unveiled a four-year economic plan that includes tax breaks and wage hikes for pensioners and employees, as he seeks to recover lost ground in opinion polls ahead of next year’s election.
Overview of the Economic Plan
The measures, with a cost of €3.5 billion ($4.06 billion) by 2030, equal to 1.5% of GDP, include an annual bonus of €400 for pensioners and €500 for public servants, zero tax for up to €20,000 annual income for farmers and families with three children and a reduction of the advance tax payment for self-employed and businesses to 50%.
Political Background and Public Sentiment
His center-right government, which was re-elected with 40.5% of the vote in 2023 promising to increase incomes, remains ahead in opinion polls but support has slipped to below 30% amid a protracted cost-of-living crisis and allegations of corruption.
Public Protests and Scandals
In December, thousands of farmers took to the streets to demonstrate over low prices of their products, high energy costs and a farm aid fraud scandal that sparked political resignations and drew a hefty EU fine.
Economic Recovery and Growth
From Crisis to Growth
After a financial crisis in 2009 that triggered fears Greece would crash out of the euro zone, the country is now one of the best-performing in Europe.
Greece’s economy is expanding at an annual rate of 2%, outpacing the euro zone average. It expects a primary surplus of about 4% this year, double what was initially expected, giving fiscal space to fund the new measures.
Prime Minister’s Vision and Announcements
“The road from bankrupt and the fringes of Europe to the epicenter of Europe has been long,” said Mitsotakis, adding that the time has come to “reap the benefits of our efforts.”
He was delivering his annual economic speech in the northern city of Thessaloniki. Mitsotakis also announced new annual hikes in the minimum monthly salary to reach €1,000 by 2028, from €920 today, a reduction of half a percentage point for pension contributions for private-sector employees and 30% lower electricity wholesale prices by 2029.
Targets for the Next Four Years
He said his target in the next four years is to reduce unemployment to below 6% from 8% at present, the debt to GDP ratio to below 110% and the average monthly salary to reach €1,800 from €1,500 today. He added that he wants the country’s debt rating to be upgraded to “A” category from “BBB” today.
Additional Information
($1 = 0.8611 euro)
(Reporting by Lefteris Papadimas in Athens, Editing by Timothy Heritage, Toby Chopra and Matthew Lewis)
