The truth is that both Prime Minister Kyriakos Mitsotakis and Minister of National Economy and Finance Kostis Hatzidakis are sending the message at every opportunity that the government remains unwavering in its commitment to fiscal discipline and stability.
This means that no fiscal risks will be undertaken that could undermine the positive image of Greece abroad and the path of debt reduction, so we should not expect particularly significant benefits from the prime minister when he ascends to the co-capital in a few weeks, in within the context of the 88th International Exhibition of Thessaloniki, which this year takes place September 7-15. Nevertheless, a constant effort is being made to find at least some small margins, which will allow extraordinary benefits, without disrupting the narrative of fiscal balance that has been achieved with so much effort.
The package of measures for 2025, which is expected to be presented by Kyriakos Mitsotakis at the International Exhibition of Thessaloniki, is in the finalization phase and is expected to be finally “locked” during the last ten days of August. The finance minister, Kostis Hatzidakis, has already ensured that next year’s budget will include a specific fiscal margin framework. He has announced that the measures included in this package will have a total cost of 870 million euros.
According to information, this is a package of measures that will include actions that have already been announced by the government. Among them are the new reduction in social security contributions, the abolition of the self-employment tax for the self-employed, the increase in the housing benefit for students, the new increase in pensions, the extension of the suspension of VAT on construction, as well as the establishment of a permanent refund of the Special Consumption Tax (SCT) to farmers. At the same time, the government has added to its planning the imposition of extraordinary taxation on the “skyrocketing” profits of refineries for 2023. This extraordinary taxation is expected to raise revenues of the order of 300 million euros, a part of which will be allocated to subsidize pensioners , with the aid amount ranging from 100 to 200 euros.
What actions is the focus of the package of announcements that the government will present to the TIF
Sources from the economic staff say that the package of announcements that the government will present to the TIF will focus on actions to support the family, strengthen the workforce, tackle the housing crisis, adapt to the challenges of an aging population, improve quality of life, and strengthening the financial independence of young people.
Specifically, they are planning:
Interventions in the benefit scheme, with a further increase in child benefit.
Strengthening of the housing policy, through the “My Home 2” program, totaling 2 billion euros. The government is in final negotiations with the European Commission for the utilization of community funds that will subsidize the tranche of housing loans for households with expanded age criteria in relation to the first cycle of the program.
Supporting young couples, large families and beneficiaries of the Minimum Guaranteed Income through the “Social Compensation” program, which will provide housing from the pool of idle State real estate, in return for a low price.
Improvements to the “Renovate – Rent” program, with an increase in the subsidy to 60% from the current 40% and an increase in the maximum expenditure limit to 15,000 euros from 10,000 euros.
Expansion of the productivity bonus in the State, with the aim of increasing the efficiency and reciprocity of civil servants.
It should be noted that the 2025 budget will again aim for a primary surplus of 2.1% of GDP. However, the new Stability Pact of the European Union introduces new data, setting limits on the increase in net primary expenditure of member states. In the case of Greece, the Commission’s initial proposal foresees an annual increase in net primary expenditure of around 3% for the period 2025 – 2028, i.e. an increase of around 3 billion euros per year. These objectives will be integrated into the Medium-term Structural Budget Program, which is being drawn up by the Ministry of Finance in collaboration with the Commission, with the aim of being approved at the end of September.
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