Greek Prime Minister Kyriakos Mitsotakis announced a €3.5 billion economic support package on September 5, 2026, aimed at boosting incomes through tax breaks and wage hikes ahead of national elections next year. According to Reuters and Bloomberg reporting from Athens, the center-right administration is rolling out measures totaling 1.5% of GDP by 2030 to counter a protracted cost-of-living crisis that has dragged down public support in opinion polls.
Four-Year Economic Plan Targets Incomes and Taxes
Speaking during his annual economic policy address in the northern city of Thessaloniki, Prime Minister Mitsotakis outlined a comprehensive rollout of financial relief spanning across 2026 and 2027. According to government officials cited by Reuters, the package includes annual cash bonuses of €400 for pensioners and €500 for public servants. Additional provisions feature zero tax for up to €20,000 of annual income for farmers and families with three children, alongside a reduction of the advance tax payment for self-employed individuals and businesses to 50%.
The administration is also targeting wage growth, setting a trajectory for the minimum monthly salary to reach €1,000 by 2028, up from the current €920. Pension contributions for private-sector employees will drop by half a percentage point, and wholesale electricity prices are slated to fall by 30% by 2029. Three government officials stated that the initiatives are designed to support nearly all social groups and agricultural workers without jeopardizing the country’s broader fiscal stability.
Fiscal Space and Economic Context
Greece is funding the multi-billion-euro initiative through strong macroeconomic performance, featuring an annual economic growth rate of 2% that outpaces the broader euro zone average. According to Reuters, the country expects a primary budget surplus of about 4% of gross domestic product this year, roughly double initial forecasts. This unexpected fiscal space has allowed Athens to finance the relief program while working toward long-term structural targets.
Despite this expansion, economic challenges persist. Unemployment stands at 7.9%, remaining above the European Union average of 6.1%, while GDP per capita in purchasing power remains among the lowest in the bloc. Labor Ministry data indicates that average monthly incomes remain anchored at 2009 pre-crisis levels of €1,500, even as food, energy, and residential rent costs have climbed by at least 30% over the same period.
Political Stakes and Public Response
The spending package arrives as Mitsotakis seeks to stabilize political backing. Reuters reports that his center-right government, which secured 40.5% in the 2023 elections on promises of raising wages, has seen its poll numbers slip to roughly 29% amid persistent inflation and corruption allegations. Public frustration boiled over in December when thousands of farmers demonstrated against low commodity prices, high energy bills, and a farm-aid fraud scandal that triggered political resignations and a significant EU fine.
Labor unions organized counter-demonstrations in Thessaloniki coinciding with the Prime Minister’s speech, demanding more generous wage increases and immediate relief from high consumer prices. Mitsotakis defended his trajectory during his address, noting that “the road from bankrupt and the fringes of Europe to the epicenter of Europe has been long” and arguing that the time has arrived to reap the benefits of those national efforts.
Long-Term Targets Through 2030
Looking ahead, the Greek government has established clear economic benchmarks for the next four years. According to Reuters coverage from Athens, administration targets include driving unemployment below 6%, lowering the debt-to-GDP ratio below 110%, and raising the average monthly salary to €1,800. Furthermore, Athens aims to secure an “A” category credit rating, advancing from its current “BBB” standing.
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