Greek Prime Minister Kyriakos Mitsotakis announces tax cuts, pay increases and bonuses a year ahead of Greece’s elections

Greek Prime Minister Kyriakos Mitsotakis announced on Saturday a fiscal package worth 2.2 billion euros for 2027, which includes tax cuts, salary increases, and bonuses for pensioners and public-sector employees. The measures, equivalent to approximately 1% of GDP, are being presented a year before the elections.

The package provides for annual bonuses of 400 euros for pensioners and 500 euros for public servants. Low-income farmers and low-income families with at least three children will be exempt from income tax. The advance payment of taxes will also be reduced for self-employed individuals and small businesses.

The minimum wage will rise to 950 euros per month, and a further increase to 1,000 euros is planned for 2028. Pension contributions will be reduced by 0.5%.

The government is basing its measures on the performance of the economy, which is growing by approximately 2% annually, above the eurozone average. Athens estimates a primary budget surplus of around 4% of GDP for this year.

However, the announcements come against the backdrop of declining electoral support for Mitsotakis’s party, below 30%, amid the cost-of-living crisis and corruption allegations.