The Prime Minister Kyriakos Mitsotakis announced a framework of interventions aimed at strengthening wages and pensions, supporting families, and housing during his speech at the “Ioannis Vellidis” Conference Center, as part of the 88th Thessaloniki International Fair.
Measures for wages, pensions, and allowances
The Prime Minister announced that social security contributions will decrease by 1% starting January 1st, instead of the initial plan of 0.5%. At the same time, pensions for more than 2,000,000 beneficiaries will increase by 2.2% to 2.5% from January 1st.
He also announced that the minimum wage will increase from April, from the current 830 euros, with a goal to reach 950 euros by April 2027, which will automatically raise the allowances and many other benefits.
Additionally, he stated that in December, 670,000 pensioners with an income up to 1,600 euros who still have a personal difference will receive up to 200 euros, while 767,000 beneficiaries of the Child Benefit will receive an additional installment of the benefit. He further noted that 220,000 beneficiaries of disability benefits from OPEKA and EFKA will receive an additional 200 euros, as will 35,000 uninsured seniors, while 205,000 beneficiaries of the Minimum Guaranteed Income will receive an increase of 50%.
Furthermore, he emphasized that from spring, nearly 700,000 public servants will start to see new annual increases that will gradually reach 100 euros per month.
He also mentioned that the remuneration for on-call doctors in the public health system will be taxed separately at a rate of 22%, which equates to an average increase in earnings of 130 euros per month. He also spoke about an additional incentive of up to 7,200 euros annually for doctors who will staff health facilities in remote areas, as well as free afternoon surgeries for 37,000 citizens funded by the Recovery Fund.
Upgrade of schools
The Prime Minister referred to a new program called “Marietta Giannakou” for the upgrade and renovation of hundreds of schools amounting to 250 million euros from the Public Investment Program, with the aim of this amount being significantly increased through private donations.
He also stated that the compensation for night work for uniformed personnel (Armed Forces, Coast Guard, Police, and Firefighters) will increase by 20%.
Complete abolition of the Business Tax
The Prime Minister announced the complete abolition of the Business Tax, providing an annual benefit of 325 euros for each self-employed person or sole proprietorship. He also said that the minimum taxable amount for freelancers will decrease in areas with 1,500 residents instead of 500, and the criterion for the maximum wage of a worker will be calculated only comparatively, not cumulatively.
Additionally, the Special Tax on Landline Telephony, which is set at 5% for fiber-optic connections with speeds exceeding 100 Mbps, will be abolished.
Measures to support families
The Prime Minister mentioned that allowances for new parents will increase by 20 million, with 173,000 vouchers and 20,000 new nursery positions. He also said that employers who facilitate their staff with benefits of up to 5,000 euros annually for new parents will be exempt from tax for this amount, which will increase for each new family member. He also spoke about the convergence of rights for families with three children to those with many children, regardless of income: from hiring in the public sector and admission to universities to participation in social tourism programs. He additionally noted that the “Neighborhood Nannies” initiative will be expanded with vouchers of up to 500 euros for each child, while he mentioned the immediate abolition of the 15% tax on health insurance for children up to 18 years old and free fertility checks for women aged 30 to 35, as well as simplifications of EOPYY coverage for assisted reproduction.
The Prime Minister spoke about the reform of unemployment benefits to prevent them from being used as an excuse for undeclared work, directing assistance to those in genuine need. He also stated that the three main social benefits—Minimum Guaranteed Income, housing benefit, and child benefit—will be made fairer, more effective, and more targeted, aiming to reduce child poverty in the country.
Measures for farmers
Regarding farmers, he said that the return of the Special Consumption Tax on agricultural oil will be made permanent from 2025, and in the coming years these amounts will be returned in a fair and proportional manner. Furthermore, a flexible management system for “red” loans for farmers and cooperatives will be institutionalized, allowing the interests to be reduced based on their capabilities and eliminating part of the owed principal, while long-term repayment will allow for refinancing and definitive settlement, eliminating encumbrances.
He also spoke about a 600 million euro program to enhance greenhouse cultivation across the country, as well as a plan for the exchange and compensation of idle public lands owned by the Ministry of Rural Development. Investors in the sector will take over these areas for cultivation, constructing large-scale greenhouses exclusively for high-value export agricultural products.
Program “My Home” II – Tax exemption for owners renting out closed properties
Regarding housing, he said that the “My Home” II Program is starting, amounting to 2 billion euros from the Recovery Fund, to help over 15,000 young people or couples aged up to 50 years acquire their first home, with an interest rate half of the commercial one. He also mentioned a 400 million euro program for loans up to 20,000 euros with zero interest aimed at energy upgrading thousands of old homes.
Additionally, there will be a three-year exemption from rental income tax for owners who rent out closed properties or if they convert a short-term rental into a long-term one. On contracts through platforms, a new, increased fee will apply, the Prime Minister noted. He also announced a ban on new short-term rentals in the three central areas of Athens for at least one year.
The Prime Minister stated that the discount on ENFIA for owners who insure properties worth up to 500,000 euros against natural disasters will increase by 20%. Properties of higher value will retain the 10% VAT discount if insured; if not, starting from April 2025, they will not be compensated by the state in case of damage. All businesses with a turnover exceeding 500,000 euros will be required to insure against natural disasters. Otherwise, they will not be compensated. This will also apply to every new contract, as well as for the renewal of old contracts for private or professional use vehicles.
Support for businesses
The Prime Minister emphasized that incentives for innovation, business mergers, and acquisitions are being expanded, with tax deductions of up to 315% for investments in research. He also pointed out that the minimum capital requirement for a company resulting from the transformation of smaller ones is limited to 100,000 euros.
He noted that the Stamp Duty has been abolished for hundreds of transactions: from interest on business loans or insurance operations to credit for imports and budgets for construction 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 introduced to finance startup companies with at least 250,000 euros. Additionally, a new National Investment Fund is to be established, with 300 million euros in funds to provide incentives for dynamic initiatives, especially in high-value-added sectors. He also announced the development of 12+1 regional development plans with many small and large projects in every municipality and every mountainous or island community.
Furthermore, he spoke about the abolition of 15 time-consuming bureaucratic procedures aimed at reducing administrative burdens by 25%, mainly for exporting businesses.
Measures for tourism
The Prime Minister mentioned that a Cruise Tax will be imposed for each passenger disembarking at a Greek port. This tax will be higher in Santorini and Mykonos, lower in other ports, with a scaling based on the season.
Moreover, from April to October, the Climate Crisis Resilience Tax will increase proportionally for hotels, accommodations, and rental properties through platforms. The specific revenue, as he stated, will return to local communities to better organize their infrastructure against the burden they receive every summer.
Thessaloniki International Fair: The 45 measures announced by the Prime Minister
Key points from the speech
The following are key points from the Prime Minister’s speech:
- I am in Thessaloniki for the 6th time as Prime Minister, with three years ahead of us.
- I am here much more experienced. We have gone through many and different trials, obstacles that have made us stronger. I am here with you determined to honor your trust, making good on the commitments for which the citizens chose New Democracy, so that by 2027 Greece will be a country of prosperity in every corner and for every citizen.
- Greece changes year by year.
- Last year I committed that we would regain the investment grade. We did it. That wages and pensions, and increments would increase. All of this has become a reality, 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. The latest data shows that there are half a million more workers than in 2019.
- I had said we would take measures for tax justice. We did it.
- Transformational reforms that seemed impossible have been made. The judicial map has been transformed.
- We implemented the Digital Work Card. There has been an impressive and immediate increase in declared overtime.
- There are many, both big and small, that we have said and done, from the panic button to the electronic ticket at stadiums and the My Coast application.
- It is becoming common knowledge that our defense against the climate crisis requires solidarity.
- We did not hesitate to tax the windfall profits of companies.
- The battle against inflation will continue. We are accountable only to the Greek people.
- We are implementing without delay a program that citizens emphatically approved in 2023.
- I speak of a complete roadmap to the future.
- Our partners in the EU know that the Greek economy is on solid foundations.
- Different were the needs of 2019 when an economy struggled to emerge from the crisis, different are the current. What is needed now is the intensity of growth and its redistribution.
- I will focus on 9 such challenges.
- The coupling of national development with the rise in citizens’ incomes.
- The increase in employment, particularly among women and youth.
- The need to improve the productive and technological maturity of our economy.
- The faster and fairer green transition. Clean energy must also become cheap energy.
- The reduction of the side effects of rapid growth is sought. We have seen it in a few of our islands concerning cruise tourism.
- The balanced organization of public space. The foundation of development and tourism development must be environmental protection.
- The more effective management of demographic issues.
- The pressures exerted by the climate crisis on infrastructure and public finances, with more intense natural disasters.
- The strict fiscal framework of the EU.
Support measures for wages, pensions, and allowances
- I do not have today a bag with reckless benefits. Our expenditures are rightly balanced in three categories: 6 billion for defense in 2025 because we will receive the first Belharra frigate, 1 billion in support of middle incomes and family protection, addressing housing issues, supporting healthy entrepreneurship.
- Pensions for more than 2,000,000 beneficiaries will increase by 2.2% to 2.5% starting January 1st.
- The minimum wage will increase from April from the current 830 euros, aiming to reach 950 euros by April 2027, which will automatically raise increments and many allowances.
- From the taxation of refineries, an extraordinary boost of 283 million euros will be allocated in December to nearly 2 million citizens.
- In December, 670,000 pensioners with an income up to 1,600 euros who still have a personal difference will receive up to 200 euros.
- 767,000 beneficiaries of the Child Benefit will receive an additional installment of the allowance in December.
- 220,000 beneficiaries of disability benefits from OPEKA and EFKA will be aided with 200 euros, as well as 35,000 uninsured seniors.
- 205,000 beneficiaries of the Minimum Guaranteed Income will receive an increase of 50%.
- From spring, nearly 700,000 public servants will see new annual increases that will gradually reach 100 euros per month.
- The remuneration for the on-call doctors in the public health system will be taxed separately at a 22% rate, resulting in an average increase in earnings of 130 euros per month.
- Compensation for night work in the armed forces, fire service, police, and coast guard will increase by 20%.
- Better income means fewer burdens. Social security contributions will decrease by 1% starting January 1st, instead of 0.5% which was the initial plan.
- The Business Tax will be completely abolished in 2025 for every self-employed person.
- The minimum taxable amount for freelancers will be reduced in areas with 1,500 residents instead of 500, while the criterion for the maximum salary of an employee will only be calculated comparatively, not cumulatively.
- The Special Tax on Landline Telephone services, which amounts to 5% for fiber-optic connections with speeds above 100 Mbps, will be abolished.
- Greece cannot become Switzerland or Denmark within five years, but it can improve continuously.
- I know that the first stumble of the government becomes a source of doubt. I understand that. But it is wrong for the opposition to project its inadequacy into the public sphere.
- Faster, fairer, more effectively, this is the message I received from the last elections, in which I remind you that New Democracy came in first for the fifth consecutive contest.
For the family
- For families, we have already increased the birth allowance to 3,500 euros. The maternity allowance now lasts for nine months. We want to incentivize businesses for the harmonious coexistence of professional and family life. Allowances for new parents will increase by 20 million, with 173,000 vouchers and 20,000 new nursery places.
- Employers who facilitate their employees with benefits of up to 5,000 euros annually for new parents will be exempt from tax on this amount, which will increase for each new family member.
- New family measures will be announced next week. Immediate abolition of the 15% tax on health insurance for children up to 18 years old.
- Free fertility checks for women aged 30 to 35 and simplification of EOPYY covers for assisted reproduction.
- Unemployment benefits are being reformed, redirecting 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 permanent return of the special tax on agricultural oil will be definitively enacted from 2025. The amounts will be returned in a fair and proportional manner.
- A flexible management system for the “red” loans of farmers and cooperatives.
- A program of 600 million euros for increasing greenhouse cultivation in the territory.
- A plan for the exchange and compensation of idle public lands belonging to the Ministry of Rural Development. Investors in the field will take charge of these areas for cultivation, building large-scale greenhouses exclusively for high-value export agricultural products.
For housing
- The “My Home” II Program is launching with a budget of 2 billion from the Recovery Fund, to enable over 15,000 young people or couples aged up to 50 years to acquire their first home at an interest rate half that of commercial loans.
- A 400 million euro program for loans up to 20,000 euros with zero interest aimed at the energy upgrading 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 income tax for three years. The same applies if they convert a short-term rental to a long-term one.
- An increased fee will apply to contracts via platforms. Any new such lease in the three central areas of Athens will be prohibited for at least one year.
- The ENFIA discount for owners insuring properties valued up to 500,000 euros against natural disasters will increase by 20%. Properties of greater value will retain a 10% VAT discount if insured; if they do not, they will not be compensated by the state for damages starting in April 2025.
- All businesses with a turnover exceeding 500,000 euros will be required to insure against natural disasters. Otherwise, they will not be compensated. This will also apply to every new contract and for the renewal of old contracts for private or professional use vehicles.
For school buildings
- A program of 250 million for the renovation of hundreds of schools. We will name it the Marietta Giannakou program.
- The aim is to significantly increase this amount through donations. And the wealthy must now shoulder greater responsibilities in the reconstruction of the homeland.
For businesses
- Emphasis on the growth and outwardness of businesses.
- Incentives for innovation, business mergers, and acquisitions are already being expanded, providing tax deductions of up to 315% for research investments.
- The minimum capital requirement for companies formed by the transformation of smaller enterprises is set at 100,000 euros.
- The Stamp Duty has become a thing of the past for hundreds of transactions.
- Changes and to the Golden Visa. We have increased the limits through real estate purchases. A “Golden Visa” will be issued for funds introduced to finance startup companies with at least 250,000 euros.
- Immediate establishment of a new national investment fund. Its role will be to provide incentives for dynamic initiatives.
- We will continue the national strategy for the development of 12+1 regional development plans.
- A new major simplification program, identifying the 15 most time-consuming bureaucratic processes that are currently plaguing businesses.
For tourism
- It goes from record to record, supporting the economy. However, we are concerned about the image in some islands regarding cruise tourism.
- A cruise tax per passenger will be imposed, scaled by season, higher in Santorini and Mykonos.
- The Climate Resilience Tax is increasing. A significant portion of the revenue will return to local communities.
- Indeed, inflation is eroding both wallets and treasuries.
- I, as the first, am upset and saddened when a state that has managed to quickly extinguish 4,000 fires is wounded by the one that got away.
- The upward trajectory has turbulence. Storms exist and will always exist. I wonder, which hand can keep the steering wheel of the national vessel steady, if not that of the government?