Greek Prime Minister Kyriakos Mitsotakis announced income tax breaks and wage increases for workers, pensioners and the self-employed on Saturday as part of a tax reform worth billions of euros ahead of elections next year.
The measures, with a cost of €2.2 billion for 2027, equal to about one percent of GDP, include an annual bonus of €400 for pensioners and €500 for public servants, zero income tax for low income farmers and low income families with three children and a reduction of the advance tax payment for self-employed and small businesses.
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 has seen its support slip to below 30% amid a protracted cost-of-living crisis and claims of corruption.
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 worth about 4% of gross domestic product this year, almost double its initial forecast, giving the necessary fiscal space to fund the new measures.
Mitsotakis also announced a new hike in the minimum salary to €950 on a monthly basis and to €1,000 in 2028 and also a reduction of 0.5% for pension contributions.
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