New relief measures for households and businesses, as well as debt reduction, are cumulatively brought about by the escape clause for defense spending and the 2025 surplus, along with higher tax revenues resulting from the reduction of tax evasion. The new package of positive interventions could reach or even exceed €1.2 billion in total for the 2026-2027 period.
This estimate is converged upon by the European Commission, due to reduced spending, the Bank of Greece, and the Parliamentary Budget Office, while (due to economic overperformance) the Minister of National Economy and Finance, Kyriakos Pierrakakis, suggests that any additional fiscal space created will be returned through benefits and relief measures to citizens and the real economy.
From the defense spending exemption alone, the amount to be directed toward positive economic interventions in 2026 is estimated to be between €550 million and €750 million. The Parliamentary Budget Office in its latest report notes that additional space for positive interventions worth €750 million is created for 2026 with the help of the escape clause for defense spending. This specific overperformance can be utilized to reduce public debt and create fiscal “cushions” that will help support public spending during periods of economic slowdown.
Regarding the estimate of fiscal space up to €750 million from the Parliamentary Budget Office, Minister of National Economy and Finance Kyriakos Pierrakakis clarified last week that such space primarily concerns next year and that the Thessaloniki International Fair serves as the milestone for the Prime Minister’s announcements regarding the following year. However, he reminded that in the past, intermediate interventions were made when the economy performed better than initially indicated by data. He meaningfully noted that “today there is nothing else” beyond this specific space and that if the economy performs better, then “at that moment” the government will be present with targeted measures.
April is crucial
April will prove to be a decisive month, as the 2025 fiscal data will be finalized. The same happened in 2024. During Easter, the return of one month’s rent to approximately 950,000 households and the permanent allowance of €250 for pensioners over 65 were announced. If estimates for a better-than-expected trajectory materialize, especially regarding permanent revenues from anti-tax evasion income, the government gets the “green light” to promote measures such as: new reductions in taxes and social security contributions, further expansion of the number of beneficiaries of the €250 allowance for pensioners over 65, from which over 1,000,000 pensioners are excluded, social benefits through increases in OPEKA allowances, abolition of business license fees, reduction of advance tax payments for businesses, creation of fiscal “cushions,” reduction of public debt.
For 2025, the primary surplus is estimated to ultimately move above 4% of GDP and reach €10 billion or even approach €11 billion (officially 2024 closed with €8.1 billion), while the Budget had 12-month tax revenues increased by €400 million compared to the target, and it remains to be seen what additional amounts will enter the public treasury from February onwards from the collection of circulation fees, remaining installments of ENFIA payments, and 2025 VAT. €683 million has already been confirmed and it is estimated that by the end of the fiscal year, it may increase to €800-900 million.
Simultaneously, the excess of regular revenues and expenditure restraint in General Government entities can add approximately another €500 million, and by the end of April, additional space close to €1.8-2 billion is likely to be formed. From this, it is considered realistic that approximately €1.2 billion can be allocated for permanent relief measures.
Interventions
Government Vice President Kostis Hatzidakis, at an event of the Thessaloniki Chamber of Commerce and Industry on January 13, 2026, mentioned -among other things- that 2026 plans include:
new reductions in taxes and social security contributions, to be announced by Prime Minister Kyriakos Mitsotakis from the podium of the Thessaloniki International Fair in September,
further simplification of the business environment and 4,050 different public procedures,
promotion of special spatial planning schemes for tourism and subsequently for Renewable Energy Sources and industry,
completion of the land registry,
further acceleration in justice, aiming for Greece to reach the EU average for issuing final decisions by 2027 (650 days),
implementation of the largest public investment program historically with €16 billion in 2026,
negotiation for the new multiannual financial framework. The Commission’s proposal provides for €49 billion for Greece for the period 2028-2034,
stronger presence of the Development Bank, starting with the Agricultural Entrepreneurship Fund,
strengthening exports, with renewal and upgrade of Enterprise Greece and participation of exporters and the private sector in decisions, and
promotion of major projects throughout Greece.
Europe
Regarding Europe, the cumulative increase in spending for 2024-2026 remains compatible with the Council’s recommendation for a cumulative increase of 9.9%, as in 2024 we had a decrease in net spending of 0.2%. After activating the national escape clause for defense spending, we have a negative cumulative balance of approximately -0.3% of GDP in 2026 or about €750 million, meaning below the maximum limit set by the EU.
* Georgios Autias is an MEP for New Democracy
