The Greek government will be operating within the tight constraints of the new Stability and Growth Pact rules through 2030 — rules that impose strict caps on net primary expenditure and, by extension, on new spending measures. According to informed sources, the room for additional relief measures remains limited, with the available fiscal space for 2027 estimated at approximately €1 billion. At the same time, Greece’s economic team is in active negotiations with Brussels, seeking to secure greater room for policy interventions — with the key argument being the additional revenues generated through anti-tax evasion measures.
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The framework within which ministries must operate when drafting the new Medium-Term Fiscal Strategy Programme 2027–2030 is laid out in a circular issued by the General Accounting Office to all General Government bodies, calling on them to submit their expenditure and policy proposals for the next four-year period by the end of July.
According to the circular, every new permanent expenditure must fall within the ceilings set by the European expenditure rule, while requests for new benefits, subsidies, or support measures will be assessed based on the available fiscal space and their compatibility with the Medium-Term Programme’s targets.
Against this backdrop, the battle among ministries to secure additional funding is expected to be particularly fierce, as every request for new spending will be evaluated against the fiscal space generated by economic growth and the country’s commitments under European fiscal rules.
This reality is also reflected in the projections for transfer payments — the largest category of primary expenditure, encompassing pensions, social benefits, grants to public bodies, and other social assistance. According to the Medium-Term Programme figures, transfers are projected to reach €35.73 billion in 2026, rising marginally to €35.79 billion in 2027 and reaching €36.38 billion by 2030.
The total increase over this period amounts to just €648.5 million, or approximately 1.8% — a figure that underscores the limited scope for expanding social spending under the new fiscal framework. This development signals that any additional benefits announced each year will need to be funded either through revenue over-performance, internal budget reallocation, or spending cuts.
Greece’s economic team believes that a significant portion of the additional fiscal space in the coming years will come from a permanent boost in tax revenues, driven by the expansion of electronic transactions and the rollout of new digital anti-tax evasion tools. These include a digital customer registry, a digital dispatch note system, the extension of the digital work card to the hospitality sector, and new AADE (Independent Authority for Public Revenue) monitoring mechanisms that use artificial intelligence applications to detect suspicious transactions and tax discrepancies.
Athens is pushing for these revenues to be recognized to a greater extent by European institutions as structural rather than cyclical, in order to create additional room for tax relief and social interventions without breaching fiscal targets. The final picture is expected to be reflected in the new Medium-Term Programme, which will be submitted to parliament alongside the 2027 budget this autumn.
On the key fiscal indicators, the new Medium-Term Programme maintains a growth target of 2% for both 2026 and 2027, while projecting significantly stronger primary surplus performance. Specifically, following a primary surplus of 4.9% of GDP in 2025, the surplus is expected to settle at 3.2% of GDP in 2026 and remain at that level in 2027 — up from a previous forecast of 2.8%.
Meanwhile, nominal GDP is revised upward to €261.3 billion this year and €272.8 billion in 2027, while faster growth combined with the early repayment of loans under the first memorandum (Greek Loan Facility) is accelerating the reduction of public debt.
As a result, the debt-to-GDP ratio is expected to fall to 136.8% by end-2026, down from the 138.2% projected in the budget, and to decline further to 130.3% in 2027 — strengthening Greece’s case for greater flexibility under the new European fiscal rules.
