The Prime Minister Kyriakos Mitsotakis announced a framework of interventions aimed at enhancing wages and pensions, supporting families, and addressing housing, during his speech at the “Ioannis Vellidis” Conference Center, as part of the 88th Thessaloniki International Fair (TIF).
Measures for wages, pensions, allowances
The Prime Minister announced a reduction of 1% in social security contributions starting January 1, instead of the initial plan of 0.5%. At the same time, pensions for more than 2,000,000 people will increase by 2.2% to 2.5% starting January 1.
He also indicated that the minimum wage will increase from 830 euros today to 950 euros by April 2027, starting in April, automatically raising the wages for those on three-year increments and many allowances.
Furthermore, he stated that in December, 670,000 pensioners with an income of up to 1,600 euros who still have a personal difference will receive up to 200 euros, while 767,000 beneficiaries of the Child Allowance will receive an additional payment of the allowance. He additionally noted that 220,000 beneficiaries of disability benefits from OPEKA and EFKA will receive 200 euros, as well as 35,000 uninsured elderly people, while 205,000 beneficiaries of the Minimum Guaranteed Income will receive it increased by 50%.
He emphasized that starting in spring, nearly 700,000 public employees will begin to see new annual increases that will gradually reach up to 100 euros per month.
He also mentioned that the on-call payments for doctors in the NHS will be taxed separately at a rate of 22%, which corresponds to an average salary increase of 130 euros per month. He also spoke about additional incentives of up to 7,200 euros per year for doctors who will staff health facilities in remote areas, while referring to free evening surgeries for 37,000 citizens funded by the Recovery Fund.
Upgrade of schools
The Prime Minister announced a new program called “Marietta Giannakou” for the upgrading and renovation of hundreds of schools, with a budget of 250 million euros from the Public Investment Program, aiming to significantly increase this amount through private donations.
He also mentioned that night pay compensation for uniformed personnel (Armed Forces, Coast Guard, Police, and Fire Department) will increase by 20%.
Complete abolition of the Business Tax
The Prime Minister announced the complete abolition of the Business Tax, resulting in an annual benefit of 325 euros for each self-employed person or individual business. He also stated that the minimum taxable amount for freelancers would be reduced in areas with 1,500 inhabitants instead of 500, while the maximum employee salary criterion would not be calculated additively but only comparatively.
Additionally, the Special Tax on Fixed Telecommunications, currently set at 5% for fiber optic connections with speeds exceeding 100 Mbps, will be abolished.
Measures to support families
The Prime Minister indicated that subsidies for new parents would be increased by 20 million euros, with 173,000 vouchers and 20,000 new positions in kindergartens. He also stated that employers who facilitate their staff with benefits of up to 5,000 euros per year for new parents will be exempt from tax for this amount, which will increase for each new family member. He also spoke about aligning the rights of families with three children with those of larger families, regardless of income: from public sector appointments to university admissions and participation in social tourism programs. He noted that the “Neighborhood Nannies” program will be expanded with vouchers of up to 500 euros for each child, while he discussed the immediate abolition of the 15% tax on health insurance for children up to 18 years old and for free fertility checks for women aged 30 to 35, as well as simplifying the coverage of EOPYY for assisted reproduction.
The Prime Minister mentioned the restructuring of unemployment benefits to prevent them from serving as an excuse for undeclared work and to direct assistance to those in real need. He also claimed that the three main social benefits: Minimum Guaranteed Income, housing and child allowances will be more just, effective, and targeted, aiming to reduce child poverty in the country.
Measures for farmers
Regarding farmers, he stated that the return of the Special Consumption Tax on agricultural diesel will be made permanent starting in 2025, and in the following years, these amounts will be returned in a fair and proportional manner. Additionally, a flexible management system for “red” loans to farmers and cooperatives will be established, so that based on their capabilities, interest rates will be reduced and part of the owed capital will be eliminated, while in the long run, repayment will be possible with refinancing options and final settlement and removal of collateral burdens.
He also mentioned a program of 600 million euros for increasing greenhouse cultivation in the country, as well as a plan for exchanging and providing inert public lands owned by the Ministry of Rural Development. Investors in the field will take over these areas to cultivate by constructing large-scale greenhouses exclusively for exporting high-value agricultural products.
“My Home” Program II – Tax exemption for owners renting out closed properties
Regarding housing, he announced the launch of the “My Home” II Program, with a budget of 2 billion euros funded by the Recovery Fund, aimed at enabling over 15,000 young individuals or couples aged up to 50 years to acquire their first home, with an interest rate half that of commercial loans. He also referred to a 400 million euro program for loans of up to 20,000 euros at zero interest, aimed at the energy upgrade of thousands of old homes.
He added that there will be a three-year exemption from rental tax for property owners who rent out closed properties or if they convert a short-term lease into a long-term one. For contracts through platforms, a new, increased fee will apply, the Prime Minister noted. He also announced a ban on new short-term leases in the three central districts of Athens for at least one year.
The Prime Minister stated that the discount on ENFIA for homeowners insuring properties worth up to 500,000 euros from natural disasters will be increased by 20%. Properties of greater value will maintain the 10% discount on VAT if insured; however, if not insured, they will not be compensated by the state in case of damage from April 2025 onwards. All enterprises with a turnover exceeding 500,000 euros will be required to have insurance against natural disasters; otherwise, they will not be compensated. This will also apply to every new contract, as well as the renewal of existing contracts for private or professional use vehicles.
Support for businesses
The Prime Minister stressed that incentives for innovation, business mergers, and acquisitions are being expanded with tax deductions of up to 315% for investments in research. He also stated that the minimum capital requirement of 100,000 euros for a company arising from the transformation of smaller companies is being limited.
He mentioned that the Stamp Duty on hundreds of transactions is now history: from the interest on business loans or insurance transactions to import credits and budgets for technical projects. And from the establishment of non-profit legal entities to the simple issuance of a professional license.
“Golden Visa” for investments in startup companies
Mr. Mitsotakis stated that a “Golden Visa” will be granted for funds brought in to finance startup companies with at least 250,000 euros. Furthermore, a new National Investment Fund will be established with 300 million euros to provide incentives for dynamic initiatives, especially in sectors with high added value. He also announced that 12+1 regional development plans are being formulated with many small and large projects in each municipality and every mountainous or island community.
He additionally spoke about the abolition of 15 time-consuming bureaucratic processes aimed at reducing the administrative burden by 25%, especially for exporting businesses.
Measures for tourism
The Prime Minister noted that cruise fees will be imposed per passenger disembarking at a Greek port. Higher fees will apply in Santorini and Mykonos, whereas lower in other ports, with scaling according to season.
Furthermore, from April to October, the Climate Crisis Resilience Tax will increase proportionately for hotels, accommodations, and rental properties via platforms. According to him, these specific revenues will return to local communities to better organize their infrastructure to support the burden they endure every summer.
TIF: The 45 measures announced by the Prime Minister
Key points of the speech
Here are some points from the Prime Minister’s speech:
- This is my sixth visit to Thessaloniki as Prime Minister, with three years ahead of us.
- I come here much more experienced. We have passed many and different trials and obstacles that have made us stronger. I stand here committed to honoring your trust, fulfilling the commitments for which citizens elected the ND, so that by 2027 Greece may find prosperity in every corner and for every citizen.
- Greece changes year by year.
- Last year I pledged that we would regain the investment grade. We achieved that. That wages and pensions would rise, as would increments. All of this has been realized, not with borrowed money, but with a prudent policy that produces surpluses and strengthens incomes.
- A year ago, I told you we would continue to create new jobs with better wages. Recent data shows half a million more workers than in 2019.
- I promised that we would take measures for tax justice. We did.
- Reforms were made that seemed impossible. The judicial map was transformed.
- We implemented the Digital Work Card. Reported overtime increased impressively and immediately.
- There are many, both big and small, that we said and did, from the panic button to the electronic ticket in stadiums and the My Coast application.
- It has become common knowledge that defense against the climate crisis requires a concerted effort.
- We did not hesitate to tax the windfall profits of businesses.
- The battle against inflation will continue. We answer only to the Greek people.
- We are implementing without delay a program that the citizens emphatically approved in 2023.
- I am speaking of a complete map for the future.
- Our partners in the EU know that the Greek economy is on solid foundations.
- The needs of 2019, with an economy struggling to emerge from the crisis, were different from the current ones. The goal now is the intensity of growth and its redistribution.
- I will stand on nine such challenges.
- The coupling of national development with the rise in citizens’ incomes.
- The increase of employment particularly among women and youth.
- The need to improve our economy’s productive and technological maturity.
- The faster and fairer green transition. Clean energy must also become cheap energy.
- Reducing the side effects of rapid development is necessary. We have seen this in a few of our islands with cruising.
- The balanced organization of public space. The foundation of development and tourism must be the protection of the environment.
- The more effective management of demographics.
- The pressures exerted by the climate crisis on infrastructures and public finances, with natural disasters of greater intensity.
- The strict fiscal framework of the EU.
Support measures for wages, pensions, allowances
- I do not have today with me a sack full of reckless provisions. Our expenditures are carefully weighted in three categories: 6 billion for defense in 2025 because we will receive the first Belharra frigate, 1 billion for support for middle income and family protection, addressing housing, promoting healthy entrepreneurship.
- Pensions for more than 2,000,000 beneficiaries will increase by 2.2% to 2.5% starting January 1.
- The minimum wage will rise from the current 830 euros, with the aim of reaching 950 euros by April 2027, automatically pulling up the increments and many allowances.
- From the taxation of refineries, an exceptional aid of 283 million euros will be provided in December to nearly 2 million citizens.
- In December, 670,000 pensioners with an income of up to 1,600 euros who still have a personal difference will receive up to 200 euros.
- Those 767,000 eligible for the Child Allowance will receive an additional payment in December.
- Beneficiaries of disability benefits from OPEKA and EFKA will be supported with 200 euros, as will 35,000 uninsured elderly people.
- The 205,000 beneficiaries of the Minimum Guaranteed Income will receive it increased by 50%.
- Starting in spring, nearly 700,000 public employees will begin to see new annual increases gradually reaching 100 euros per month.
- The on-call compensation for NHS doctors will be taxed separately at a rate of 22%, which corresponds to an average salary increase of 130 euros per month.
- Night pay compensation for the military, firefighting, police, and coast guards will increase by 20%.
- Better income also means fewer burdens. Social security contributions will be reduced by 1% starting January 1, instead of the 0.5% that was the initial plan.
- The business tax will be fully abolished in 2025 for all self-employed individuals.
- The minimum taxable amount for freelancers will also be reduced in areas with 1,500 inhabitants instead of 500, and the criterion of the maximum employee salary will not be calculated additively but only comparatively.
- The Special Tax on Fixed Telecommunications, set at 5% for fiber optic connections with speeds exceeding 100 Mbps, will be abolished.
- Greece cannot become Switzerland or Denmark within 5 years, but it can continuously improve.
- I know that the first misstep of the government becomes a source of questioning. I understand that. But it is wrong for the opposition to project its own inadequacies into the public sphere.
- Faster, fairer, more efficiently, that is the message I received from the last elections, in which I remind you that ND came first for the fifth consecutive contest.
For the family
- For families, we have already increased the birth allowance up to 3,500 euros. The maternity allowance now lasts for nine months. We want to provide incentives to businesses for the harmonious coexistence of professional and family life. Allowances for new parents are being increased by 20 million, with 173,000 vouchers and 20,000 new kindergarten places.
- Employers who facilitate their staff with benefits of up to 5,000 euros per year for new parents will be exempt from tax for this amount, which will increase for each new family member.
- New measures for families will be presented next week. The 15% tax on health insurance for children under 18 will be abolished immediately.
- Free fertility tests for women aged 30 to 35 and streamlining EOPYY coverage for assisted reproduction.
- Unemployment benefits will be restructured, directing assistance to those in genuine need. If someone can find a job, they should not be dependent on unemployment benefits. We are making the three main OPEKA benefits fairer.
For farmers
- The definitive permanent return of the special tax on agricultural diesel will start in 2025. These amounts will be returned in a fair and proportional manner.
- A flexible management system for farmers’ and cooperatives’ bad loans.
- A 600 million euro program for increasing greenhouse cultivation throughout the country.
- A plan for exchanging and transferring inert public lands owned by the Ministry of Rural Development. Investors will take over these lands for cultivation, constructing large-scale greenhouses exclusively for exporting high-value agri-food products.
For housing
- The “My Home” Program II is starting, with a budget of 2 billion euros from resources of the Recovery Fund, aimed at enabling over 15,000 young individuals or couples aged up to 50 to acquire their first residence, with an interest rate half of the commercial one.
- A 400 million euro program for loans of up to 20,000 euros with zero interest aimed at energy upgrades of thousands of old homes.
- The housing allowance has essentially doubled.
- A new dual scheme of incentives and disincentives for closed apartments: Anyone renting out a closed apartment will be exempt from rental tax for 3 years. The same applies if they convert a short-term rental to a long-term lease.
- An increased fee for contracts through platforms will apply. Any new short-term rentals will be banned in the three central districts of Athens for at least one year.
- The ENFIA discount for owners insuring properties valued up to 500,000 euros from natural disasters will increase to 20%. Properties of greater value will retain the 10% VAT discount if insured; however, if they are not, from April 2025 they will be uninsured by the state in case of damage.
- All businesses with a turnover exceeding 500,000 euros will be required to have insurance against natural disasters. Otherwise, they will not be compensated. This will also apply to every new contract and the renewal of old vehicles’ contracts for private or professional use.
For school buildings
- A program of 250 million euros for the renovation of hundreds of schools. We will name it the Marietta Giannakou program.
- The goal is for this amount to significantly increase through donations. The wealthy must now take on a greater share of the responsibility for rebuilding our country.
For businesses
- Focus on the growth and extroversion of businesses.
- Incentives for innovation, business mergers, and acquisitions are already being expanded with tax deductions of up to 315% for research investments.
- The minimum capital requirement for a company resulting from the transformation of smaller companies is limited to 100,000 euros.
- Stamp Duty on hundreds of transactions is now a thing of the past.
- Changes to the Golden Visa program. We have raised the limits for property purchases. Granting a “Golden Visa” for funds introduced to finance startup companies with at least 250,000 euros.
- Immediate establishment of a new national investment fund. Its role is to provide incentives for dynamic initiatives.
- We will continue the national strategy to develop 12+1 regional development plans.
- A new major program for simplifications will identify the 15 most time-consuming bureaucratic processes that currently burden businesses.
For tourism
- Tourism is going from record to record, supporting the economy. However, we are concerned about the image in certain islands regarding cruising.
- A cruise fee per passenger will be imposed, with scaling based on the season, higher in Santorini and Mykonos.
- The climate crisis resilience fee will increase. A significant portion of revenue will return to local communities.
- Indeed, inflation is eating away at wallets and budgets.
- I am the first to be outraged and saddened when a state that managed to quickly extinguish 4,000 wildfires is wounded by the one that escaped.
- The upward trajectory has its turbulence. There are and will be storms. I wonder, whose hand is capable of holding the steering wheel of the national boat steady if not the government’s?