From the messages sent by the Prime Minister to the Council of Ministers, the interview of the Minister of State Akis Skertsou on “Real FM” began.
Specifically, “what the prime minister pointed out is that we must try every day to put ourselves in the shoes of the citizens and to feel and empathize with their daily lives. That is, to get out of our glass offices, to get closer to society and to understand the problems of everyday life. This is what politics is all about. Our job is not to admire ourselves for the achievements of the economy, which are many and important, but to see how these are transferred as an experience in people’s daily lives.
And he continued: “We have to manage an economy that suffered from a more than ten-year debt crisis”, which is “trying to restructure, to change its production model, to offer more opportunities for private and public investment, for better incomes, better wages and pensions in the public and private sectors, and to grow at a faster pace than the rest of Europe”. At the same time, we must “solve many and long-term problems that the Greek economy has, and in the field of competition”, with the ultimate goal, “better prices for consumers”.
The conclusion of the Minister of State is that “Greece has managed to stand on its own two feet in the last five years in extremely adverse conditions”. He asked, “to continue on the same path of fiscal responsibility and dynamic growth, but to primarily support vulnerable incomes and fight a great battle to keep inflationary pressures at levels that will be lower than the increases we are giving”.
In particular, he observed that “in 5.5 years the increases are recorded in the region of 25% to 28%, cumulative inflation is from 15% to 16%, so something remains in the pocket. However, it is not enough, we fight every day”, he assured.
After all, he added, “there is no other government in the past that has messed with the refineries, with the big energy providers. We are not adversarial, but when we see that there are so-called skyrocketing profits,” then the government steps in and “redistributes that skyrocketing profitability back to consumers to support incomes.”
Another message sent by Mr. Schertsos, was that “we are on the side of vulnerable fellow citizens and we are trying to ensure that the prosperity that is noted at the macro-economic level creates better incomes, smaller inequalities”.
The budget, in fact, “includes 12 salary increases for 2025 and 12 tax reductions that come to be added to an additional 60 tax reductions, which have been voted and implemented in the previous four years”. Consequently, he continued, “we have achieved higher revenues with lower taxes. We note the largest tax reduction in the European Union based on Eurostat data.”
At this point, he also found that “the ratio of direct to indirect taxes is changing, indirect taxes were at 67% in 2019 and are at 62% today, and direct taxes were at 33% of GDP in 2019 and are at 38% ». “The tax base is expanding, there is fairer taxation,” he said, and “the fairer fiscal and economic environment offers security and attracts investment.”
Especially for the proposal to reduce the VAT, he invoked the international experience in the first place: “The socialist government of Spain applied zero VAT and based on the report of the Spanish central bank, this reduction did not reach the consumer, instead it stayed in the pockets of the middlemen”. And, in our opinion, “for each unit of VAT reduction it costs 1.5 billion. euros, i.e. based on PASOK’s proposals (it costs) 3 billion”. While he also explained that “measures that will not have a practical benefit for consumers and especially the most vulnerable, we are not mandated to implement”.
In the investment chapter he noted: “Investments as a share of GDP in 2019 were at a very low level, at 10%-11%, while in the rest of Europe it was at 21%-22%. In 2025, private and public investments thanks to better tax treatment and a more favorable investment business environment have reached 17.5%”. Citing the figures of the Bank of Greece, he emphasized that these show “a significant increase in investment in manufacturing, in the primary sector, that is, the production model is changing. We have a significant increase in exports, of products not only of services.”
Ultimately, “the goal is in 2027 to reach an economy that will be more productive, more extroverted, more innovative but also fairer. At the core of our policy is justice”, he underlined. Noting that in the past “citizens have suffered a lot from populism, irresponsibility, weak proposals”, Akis Skertsos countered: “We will proceed with responsibility, truth and documentation”.
Last economic topic of discussion, the banks, which, as he said, “are under very strict pressure in terms of fees”, while he described IRIS as a “great achievement”. He explained, however, that “banks are a different market governed by the rules of the European Central Bank. We have to be very careful not to shake the banking system, bank credit, which is very important to give loans for investments.”
The Schertsou interview closed with the imminent meeting of the prime minister and the official opposition leader: “The dialogue between the prime minister and the leaders of the opposition parties is necessary and imperative. There must be a consensus on the major issues and challenges facing the Greek economy.” “We have important milestones ahead of us, such as the constitutional revision, we would like to find consensus between the government and the opposition parties”, the Minister of State emphasized and concluded by saying that “since this cycle of internal turmoil in PASOK has been closed and SYRIZA we can have more and better polyphony, I hope not cacophony, inside and outside the Parliament. The manner in which the dialogue was conducted within the Parliament has, I think, somewhat disturbed the citizens. We need a better quality of democratic discourse in our country.”
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How does the Greek government aim to balance keeping inflation under control with boosting wages and pensions?
## Greek Economy: A Balancing Act
**Host:** Welcome back to the show. Today we’re discussing the Greek economy with Akis Skertsos, the Minister of State. Mr. Skertsos, thank you for joining us.
**Skertsos:** Thank you for having me.
**Host:** Prime Minister Mitsotakis recently outlined a vision focused on connecting with citizens and addressing their everyday concerns. How does this translate to economic policy?
**Skertsos:** The Prime Minister emphasizes empathy and understanding the lived experiences of Greeks. It’s not enough to celebrate macroeconomic achievements; we must ensure these successes translate into tangible benefits for everyone. This means tackling rising costs, fostering better incomes, and creating a fairer society.
**Host:** Greece emerged from a decade-long debt crisis. What are the key economic challenges the government faces today?
**Skertsos:** While Greece has made significant strides, we’re still working to restructure our economy, encourage investment _both private and public_, and shift towards a more sustainable production model. We’re also focused on boosting wages and pensions while keeping inflation under control.
**Host:** You mentioned inflation. Many Greeks are feeling the pinch. What steps is the government taking to alleviate these pressures?
**Skertsos:** We aim to keep inflationary pressures below wage increases. Over the past five years, we’ve seen wage increases of 25-28%, while cumulative inflation has hovered around 15-16%. We’re actively engaging with energy providers and refineries, ensuring that record profits don’t come at the expense of consumers.
**Host:** Some argue for broad VAT reductions to directly ease the burden on consumers. What’s your stance on this approach?
**Skertsos:** While VAT reduction seems appealing, international experience shows it often doesn’t benefit consumers directly. Instead, profits tend to be captured by intermediaries. We prioritize targeted measures, along with investment in sectors that drive economic growth and create jobs, ultimately leading to sustainable prosperity.
**Host:** You mentioned investment.
What progress has been made in attracting foreign and domestic capital?
**Skertsos:** Investment levels have significantly increased under this administration. We’ve incentivized private investment, fostered a more favorable business environment, and seen a surge in both manufacturing and primary sector investments. This signals a shift towards a more diversified and resilient economy.
**Host:** Looking ahead, what are your key priorities for the Greek economy?
**Skertsos:**
Our focus remains on fiscal responsibility, sustainable growth, and ensuring that the benefits of economic progress reach all Greeks. This means supporting vulnerable communities, promoting fair taxation, and continuing to attract investment to build a more prosperous and inclusive future for our country.
