Greece’s Prime Minister Kyriakos Mitsotakis is expected to unveil a four-year package of measures at the Thessaloniki International Fair (TIF), with a budget that could reach as much as 5 billion euros, as the government seeks to use the final fair before the next elections to present its pre-election agenda.
Based on consultations already held with the European Commission under the implementation of the Stability and Growth Pact, and taking into account the need to comply with the net expenditure rule, the economic team now has a clear picture of the fiscal space available for the 2027-2030 period without risking the activation of the excessive deficit procedure.
According to available information, the government’s fiscal room is expected to develop as follows:
Fiscal space
2027:
Around 1 billion euros is available for permanent support measures or broader fiscal interventions. This does not include measures that could be financed through the extension of the escape clause, not only for defence spending but also for projects linked to addressing the energy crisis. These could add a further 400-500 million.
2028:
No additional fiscal space appears to be available at this stage. However, the extension of the escape clause for energy-related measures remains in effect, potentially providing an additional amount of 500 million.
2029 and 2030:
A fiscal margin of around 500 million per year appears to have already been secured.
These amounts bring the total available fiscal envelope to around 3 billion euros. An additional 1 billion is expected to come from measures that have already been announced but will be implemented from 2027.
These include the abolition of the pensioners’ personal difference mechanism, the full exemption from the ENFIA property tax for sparsely populated areas (for primary residences only), the implementation of the new tax scale for self-employed income taxation, and a 0.5 percentage point reduction in social security contributions for employees and employers.
Two additional sources of funding
The government is also expected to tap into two further “reservoirs” of fiscal space:
1. Additional revenues from tackling tax evasion
The government is expected to seek further revenue through its tax compliance drive, a tool that has been widely used over the past two years. While measures such as the MyData platform and the linking of cash registers with POS terminals appear to have reached their current limits, additional room could be created over the four-year period.
Planned initiatives include the registration of real estate assets through the Property Ownership Registry, the expansion of the digital labour card to more sectors and the registration of social benefits recipients. These tools are expected to generate fiscal gains after mid-2027.
2. Measures that create fiscal space through burden redistribution
The government has already taken steps in this direction over the last months, including higher cruise fees and taxation on online gambling. Further measures of this type are considered likely, based not only on fiscal but also social criteria, in order to finance additional income-support initiatives.
Tax revenues
The possibility of a stronger-than-expected budget performance in 2026 remains open. However, the economic team believes that additional fiscal space from this source is unlikely, particularly for financing measures in 2027.
Tax revenues have outperformed expectations in the first seven months of the year, but this has already been factored in and utilized since April, when the government announced an 800 million package of measures targeting families, renters and pensioners.
The government already assumes that tax revenues will exceed the November budget forecast by around 1 billion euros for the full year.
Primary surplus outperformance
Even if Greece exceeds its primary surplus target — currently set at 3.2% of GDP, with some Finance Ministry officials estimating it could approach 4% this year — this would no longer automatically translate into additional room for support measures.
Under the new fiscal rules, a higher primary surplus creates greater scope for debt reduction measures. The Public Debt Management Agency (PDMA) is expected to use this opportunity to proceed with further early repayments of obligations stemming from Greece’s second bailout programme by the end of the year.
For additional support measures based on revenue outperformance, authorities must demonstrate that the extra funds originate from efforts to combat tax or social security contribution evasion. Finance Ministry officials argue that the available margins in this area have largely been exhausted for 2026.
The government is also launching a broader effort to settle overdue debts to the state through measures such as 72 instalment arrangements, the release of frozen bank accounts and wider access to the out-of-court debt settlement mechanism, covering obligations to both tax authorities and social security funds.
However, even if these measures generate additional state revenues, they cannot be used to finance new support measures, as they represent delayed collections from previous years and primarily strengthen the country’s cash position.
Για να εμφανίζονται περισσότερα άρθρα της Ναυτεμπορικής στις αναζητήσεις σας εύκολα και γρήγορα, πρέπει να προσθέσετε το site στις προτιμώμενες πηγές σας. Μπορείτε να το κάνετε πηγαίνοντας εδώ.
