Two months ahead of the Thessaloniki International Fair (TIF), the government’s main objective and that of the financial team has already been achieved: a €1.5 billion package of new benefits that the Prime Minister is expected to announce has been officially “locked in.”
However, July and August will be decisive in determining whether the package can be further expanded — potentially reaching or exceeding €2 billion, depending on the performance of the economy and state revenues by September.
The first step was the EU’s approval of a defense spending exemption clause, which created fiscal space for an additional €500 million in expenditures.
Moreover, fiscal space appears to be expanding beyond initial forecasts, based on early data from banks concerning tax payments and digital transactions via IRIS and POS systems. These now automatically reflect market activity and VAT revenue potential over the next 2–3 months through the myDATA platform.
What Measures Are Being Prioritized
According to sources, a package of around 40 interventions is under consideration. Key measures include:
- Expanded tax deductions for families with children
- Raising the basic tax-free threshold for single taxpayers (currently stuck at €8,636 since 2015)
- Targeted reductions in direct taxation aimed at easing the burden on middle-income earners and property owners
These measures are being evaluated either collectively or alternatively, with additional proposals still being discussed.
A key reform being explored is adjusting tax brackets and rates, with the goal of providing relief to those earning between €20,000 and €50,000, thereby boosting disposable income for middle-income groups.
Further interventions are planned for rental income, as the government seeks to:
- Ensure more proportional tax burdens
- Incentivize accurate rental declarations
- Contain surging rental prices
- Bring thousands of vacant properties back onto the market
Surprise announcements are also not ruled out, especially if more fiscal space opens up by late August, when final decisions will be made.
New Room in the Budget
The Ministry of National Economy is currently assessing the additional fiscal room granted by Ecofin, following the green light for the defense spending exemption clause. This allows Greece — one of 16 EU member states benefiting from the exemption — to exclude these expenses from the strict rules of the new Stability Pact, adding over €500 million in new budget space.
This amount was added to the €1 billion already saved through:
- Containing primary expenditures
- Overperformance in anti-tax evasion measures
Thus, the total aid package has so far reached €1.5 billion.
Beyond the Numbers: Social Pressure and Political Stakes
However, the pressure is not just fiscal. Revelations about subsidies being paid to “ghost farmers” by OPEKEPE (Greek Payment Authority of Common Agricultural Policy Aid Schemes) have caused serious backlash, raising the need to:
- Address new support needs
- Protect the incomes of law-abiding farmers, which may be at risk depending on how the EU imposes fiscal corrections
The Prime Minister’s Office (Maximos Mansion) is also considering moves to support large social groups. A government source stressed:
“The Thessaloniki package cannot be merely developmental — it must carry a strong social footprint.”
This suggests that the announcements may take on a pre-election tone, even if elections are not officially on the horizon.
The same source adds:
“The challenge for the government is not just to capitalize on the available fiscal space, but also to rebuild bridges of trust with social groups that feel left behind.”
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