The application of the new fiscal rules narrows the margins of the financial staff for benefits in the next period of time, in view of the Prime Minister’s speech at the TIF on September 7.

At this time, the financial staff is examining all the margins that exist, placing particular emphasis on the part of the reforms, the improvement of the daily life of the citizens and the further strengthening of incomes. Despite the fact that the budget is overperforming, relevant officials are lowering the bar of expectations given the extraordinary circumstances due to natural disasters.

What they make clear is that any announcements by Kyriakos Mitsotakis will not be in the form of concessions but mainly in reforms and improvements where necessary, with particular emphasis on interventions to deal with the housing and demographic problem.

With the exception of dealing with the housing issue, the prime minister’s speech is expected to focus on “measures” that will improve the everyday life of the citizens and also on increasing their income. The final mix will be finalized barely 24 hours before the Prime Minister’s speech, so the Ministry of National Economy and Finance will have a clearer picture of the course of this year’s budget, but also of what can be included in the 2025 budget.

In the focus demographic – housing

With demographics being the number 1 problem not only for Greece but also for Europe as a whole, the restructuring of social benefits and the equalization of three-child families with large families are already being planned.

Finding housing is a major issue, especially for young people and vulnerable households. In this specific problem, the government will “recruit” a series of interventions such as:

The program “My House 2” amounting to 2 billion euros. Discussions with the Commission continue with the aim of reaching an initial agreement before the TIF. According to competent sources, under discussion is that 50% (1 billion euros) of the financing of the program should be covered by loans from the Recovery Fund and the remaining 50% (1 billion euros) by bank loans. If the Commission agrees, the specific program could be implemented normally from 2025. The main changes planned are:

  • the expansion of the beneficiaries in terms of the age that will reach 50 years, from 39 that was in the previous
  • the expansion of the income criteria with a special provision for zero interest for three and many children
  • the age of the properties to be less than 15 years.

Social Compensation. By the end of the year or at the beginning of 2025, it is expected that the first international tender will be announced for the construction of 3,000 houses on State plots, as well as the utilization of another 1,600 vacant properties throughout the country for housing 5,000 new couples with social criteria. Through the program it is estimated that by 2026 houses will have been built in Kifissia, Larissa, Xanthi and Volos, while the first apartments are expected to be made available from the already existing properties of the State within 2025. The rent will be low, based on social and economic criteria and will concern young people aged 18-39.

“Renovating – Renting”. There will be improvements to the conditions for the “Renovate – Rent” program, which is expected to start again later this year. The aim is to increase the subsidy from 4,000 to 6,000 euros (60% for total costs up to 10,000 euros) and the advance payment of the amount to 50%. The main goal of the Ministry of Social Cohesion is to reach 12,500 homes that will be renovated and then made available for rent.

Support of vulnerable social groups

In addition to any interventions that will be heard by the prime minister from the stage of the TIF, the government has already announced measures of a permanent nature amounting to 880 million euros which will be included in the 2025 budget. These are:

  • the reduction of insurance contributions by 0.5%, costing 215 million euros. (there may be some surprises)
  • the abolition of the pretense fee for professionals, costing 120 million euros.
  • the permanent return of the Special Consumption Tax to farmers, costing 100 million euros.
  • the increase of the student housing allowance, costing 15 million euros.
  • the increase in pensions, which is estimated to be around 400 million euros.
  • the suspension of VAT on construction, costing 20 million euros.

Personal difference allowance

Also on the table is the determination of the list of beneficiaries who will share the 300 million euros from the taxation of the refineries’ surplus profits. What the Prime Minister has said is that they will target pensioners who will not see their pay increase due to a personal difference.

Nevertheless, it is under consideration, if possible, to include other vulnerable social groups among the beneficiaries. It is recalled that last year the amount of aid paid amounted to 200 euros for pensions up to 700 euros, 150 euros for pensions from 701 to 1,100 euros and 100 euros for pensions from 1,101 to 1,600 euros. A necessary condition was that the monthly pension should not exceed 1,600 euros.

In the coming days, it is expected to clarify the landscape as to whether by September 7 there will be any announcements by the Prime Minister regarding changes to the child allowance, any improvements in the taxation of those who own properties with short-term leases and also of freelancers.

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