Tight, targeted spending, with a 2027 horizon
In keynote speech, PM says he wants all to share in growth
Prime Minister Kyriakos Mitsotakis had a message for the crowd of eager listeners to his speech at the Thessaloniki International Fair: He did not come with a bag containing gifts.
Mitsotakis emphasized he did not want to compromise the country’s recovery from its long, painful financial crisis by straying from the European Union’s post-pandemic fiscal rules, which seek to keep spending growth under control.
But he did announce a number of programs, from subsidies to tax cuts, designed to help private and public sector employees, seeking to retain young farmers and tackling housing shortages and the country’s low birthrate.
In 2025, with limited opportunities for extra spending due to EU rules and defense spending commitments, pensions will rise 2-2.5% and the minimum wage, too, to €830 per month. The goal is to have the latter rise to €950 by April 2027, he said.
Many of the measures have a 2027 horizon: not coincidentally, the year of the next national election, if it takes place as scheduled and is not brought forward. “We have more than a thousand days to implement our program,” the prime minister said. He also denied that his government is suffering from reform fatigue, or what he termed the “second-term curse.”
Even as he focused on economic challenges, Mitsotakis’ speech was also political. It came about three months after the European election, where ruling New Democracy saw its share of the vote drop from nearly 41% in the last national election of June 2023 to just over 28%. The main beneficiaries were not the second biggest party, left-wing SYRIZA, which also saw its vote share drop, but the extreme right and, to a lesser extend, socialist PASOK. Thessaloniki, Greece’s second-largest city, and the north in general, is an extreme-right stronghold. Mitsotakis made sure to remind his audience that he appointed Apostolos Tzitzikostas, the popular, and populist, governor of Central Macedonia, as Greece’s next European commissioner.
His party, the conservative New Democracy, is the only one that can guarantee political stability, Mitsotakis claimed. And, in the face of recent public criticism, he added that the government and the party make good on their commitments to the people.
Some of the programs announced, such as a second round of subsidized mortgage loans, will be partly funded by the EU. The EU will also fund zero-rate loans for people to make homes more energy efficient. Talks are also under way to get some €51 million to provide free afternoon surgeries in public hospitals.
A measure especially noted by Mitsotakis is a larger-than-expected cut in social security contributions by both employers and employees.
Concerning tourism, while warning against “demonizing” short-term rentals, Mitsotakis announced a freeze in the expansion of such rentals in Athens over the next year. And, in a move against overcrowding on islands, disembarkation fees for cruise passengers will rise sharply, nowhere more than in the famous tourist destinations of Mykonos and Santorini, Mitsotakis said. In the case of Santorini, officials have already let it be known that the fee will rise from 35 cents per passenger currently, to somewhere between €10 and €15, if not higher.
In closing, Mitsotakis said that Greece must break out out the all-too-familiar cycles of success and disaster and become more powerful than its size would warrant.
