Despite the summer lull, the government is picking up the pace to finalize the support measures package set to be unveiled at the Thessaloniki International Fair (TIF), with the economic team examining wide-ranging social interventions. This year’s TIF package is expected to include a series of tax relief measures and social support initiatives, aimed at addressing the ongoing cost-of-living pressures facing households and professional groups. According to government sources, the plan calls for a phased rollout of measures, with several interventions set to take effect in the new year. This approach, government circles argue, reflects a strategy oriented toward completing the full four-year term rather than short-term electoral maneuvering.
A political message ahead of the new season
Beyond the economic dimension, the government’s TIF announcements are also expected to serve as a political statement. The government’s goal is to strengthen its relationship with social groups that are showing signs of drifting away or expressing dissatisfaction with certain policy choices.
As part of the preparations, particular emphasis is being placed on communication with New Democracy’s parliamentary group members. The parliamentary group session is expected to serve as a forum for recording concerns relayed from local communities, as well as gathering proposals to shape the final measures.
The final decisions
The coming weeks are considered critical for completing the government’s planning. The final package must strike a balance between fiscal capacity, the need to support citizens, and the political goals set by the Prime Minister’s Office ahead of the new political season. The prime minister’s presence in Thessaloniki is therefore expected to become the defining moment for the government’s economic and political agenda.
From pensioners to the middle class
At the center of the government’s deliberations are social groups with varying demands and heightened needs. Pensioners, public and private sector workers, self-employed professionals, farmers, and the middle class represent the primary categories toward which interventions are expected to be directed. The middle class remains one of the government’s top priorities, as the Prime Minister’s Office acknowledges that the pressure from rising everyday expenses has significantly affected citizens’ expectations and attitudes.
Measures for pensioners
– The previously announced increase to €300 of the now-permanent annual pension supplement paid every November will ultimately reach €100, covering part of the former Christmas bonus, alongside a broadening of income thresholds so that 1.75 million pensioners can receive the fixed benefit of up to €400. Eligible recipients must have a total annual household income not exceeding €25,000 for single pensioners and €35,000 for married couples, while total real estate assets must not exceed €300,000 for single and €400,000 for married recipients.
– A general pension increase will be granted in December, which, due to inflation, is expected to be around 3%, up from the initially announced 2.7%.
– A definitive end to the personal difference offset. The 2027 budget will provide for a full increase for 670,000 pensioners who still have a remaining personal difference balance. This amount will not be subject to social security contributions (health insurance and solidarity levy), but only to income tax, as it is considered income outside the pension that is taxable alongside the pension. Social security contributions will continue to be calculated — as they are now — on the sum of the national and contributory pension. By abolishing the offsetting of increases against the personal difference, pensioners with a large remaining balance (€150 or more) stand to benefit the most, as they will receive real increases every year, whereas — had the offset remained in place — they would not have seen actual increases for five to ten years.
Favorable arrangements are also expected for the Solidarity Allowance (EAS), including the abolition of percentage-based deductions for amounts above €1,436. A new platform will be created to calculate the difference at each tier, applying deductions only to that differential amount. The abolition of the EAS on supplementary pensions is also expected.
The already-decided measures
Alongside the new announcements for pensioners, the following already-approved interventions for broader categories of citizens will also come into effect:
– Income thresholds are being expanded for doctors, teachers, and nurses serving in regional areas to qualify for a two-month rent subsidy for their primary residence. Eligibility requires a total annual household income of up to €25,000 for single individuals, up to €35,000 for married couples — increased by €5,000 per dependent child — and up to €39,000 for single-parent families with dependent children, also increased by €5,000. The subsidies, in the form of a rent refund for 2026 and beyond, covering rents paid from 2025 onward, correspond to two months’ rent and cannot exceed €1,600 per year. This cap increases by €100 for each dependent child.
– Nearly 10,000 civil servants will receive an “equalization allowance” of €300 instead of the “personal difference” supplement. The measure provides that employees in specific public service positions where a personal difference is paid to longer-serving staff will receive a monthly amount of €300 to smooth out pay disparities, applicable retroactively from April 1, 2023. This amount is included in regular remuneration.
Support for farmers
Farmers also stand to benefit from support measures — a sector that has been hard hit by the OPEKEPE scandal and with which New Democracy is seeking to rebuild both political and social ties. It is no coincidence that the Property Ownership and Management Registry (MIDA) will open with declarations of agricultural properties, so that payments can be made this year on time and based on data declared in the registry.
Interventions under consideration for taxis, property owners, and diagnostic centers
There is a lively debate within the government’s economic team regarding taxis, as it explores further ways to support the sector. On the table are reductions to the minimum deemed income or other tax relief for taxi license holders who acquired their license through inheritance, as well as special support measures for drivers who are not also license owners.
ENFIA property tax cuts, clawback changes, and vehicle tax reduction scenarios
For property owners, a new targeted reduction in ENFIA (the annual property tax) remains a live option, while for diagnostic centers, changes to the compulsory clawback and rebate system are under consideration that would relieve them of some of their current financial burdens.
The Finance Ministry is also examining a possible reduction in vehicle registration fees, potentially for older vehicles, acknowledging the reality that the cost of purchasing a new car has risen significantly and that the burden on owners of older private vehicles is substantial.
TIF measures for small and medium-sized businesses
The expansion of fiscal space — exceeding €1.2 billion and potentially reaching up to €2 billion — driven by economic growth and the strong performance of digital tools (IRIS, myDATA, Digital Work Card, etc.) — is unlocking a range of pivotal new measures. At the heart of the economic team’s planning are corrections to the deemed income taxation system, reductions in taxes and social security contributions, and measures to boost business liquidity, with the aim of supporting the real economy. Prime Minister Kyriakos Mitsotakis has already signaled the political direction of the upcoming announcements, indicating that the TIF will focus on the middle class, the self-employed, and small and medium-sized enterprises. Final decisions are expected to be made after the completion of a full fiscal assessment. The interventions under consideration mainly concern the 2026 tax year — that is, the upcoming tax filings — and form part of a broader plan to overhaul the tax framework. Government sources stress that the deemed income taxation system introduced under the Hatzidakis law is not being scrapped, but rather that specific provisions which have revealed weaknesses or created excessive burdens for certain professional categories are being corrected.
The implementation of the new taxation method has affected approximately 670,000 self-employed individuals and sole traders. Many taxpayers found themselves being taxed on incomes higher than those they declared, prompting strong reactions from professional associations and market organizations. The economic team, on the other hand, argues that the reform delivered significant results in tackling tax evasion, curbing underreporting of income, non-issuance of receipts, and the artificial declaration of very low incomes that did not reflect actual economic activity. Five core tax interventions are on the table as a unified package of measures:
1. The top priority is a reform of the deemed income taxation system. Central to the discussions is the decoupling of the minimum deemed income from the minimum wage, since every increase in minimum pay automatically raises the tax base for the self-employed, even when their actual income remains unchanged. The economic team is examining two main scenarios:
The first involves freezing the next adjustment of the minimum deemed income to prevent a new automatic increase in the tax burden.
The second considers reducing deemed income by 10% to 20% for specific categories of self-employed individuals and sole traders, based on criteria related to the nature and characteristics of their activity. Changes are also being examined to the surcharges applied based on years of professional activity, number of employees, and turnover, while expanding the categories eligible for reduced deemed income or larger deductions is also on the table. Special consideration is being given to young professionals operating in low-population or economically underdeveloped areas, with the aim of boosting entrepreneurship in the regions.
2. Another significant intervention is a reduction in advance income tax payments. According to the most likely scenarios, the advance tax payment for the self-employed may be reduced from 55% to 40%, while for small and medium-sized enterprises, a rate between 50% and 60% is being considered depending on annual turnover. This change is expected to improve market liquidity by easing the cash flow pressures businesses face.
3. The full abolition of the business activity levy for companies also remains on the table. Following its abolition for self-employed individuals from 2025, the measure is now being considered for extension to businesses, which continue to pay between €800 and €1,000 per year regardless of whether they turn a profit or a loss. This has long been a standing demand from the market and business associations.
4. The plans also include a reduction in the corporate income tax rate from 22% to 20%. The government believes such a move would boost the competitiveness of Greek businesses, increase available capital for investment, and serve as an additional incentive to attract new business activity to the country.
5. The TIF package is expected to be rounded out with a further reduction in employer social security contributions by half a percentage point. This represents a continuation of the policy of gradually reducing non-wage labor costs pursued in recent years, with the primary goal of supporting employment and job creation.
The TIF energy package takes shape — €1.1 billion in projects by 2028
At the same time, the list of energy projects to be presented by the prime minister at the TIF is being finalized by the end of August, as the government moves to lock in investments to be funded through the new European escape clause. The first step was taken when Finance Minister Kyriakos Pierrakakis formally submitted Greece’s request to the European Commission to extend the existing national escape clause to cover projects that strengthen the country’s energy resilience.
This development opens the door to a new investment program expected to exceed €1 billion by 2028. According to the economic team’s plans, investments activated through the energy escape clause are estimated at €350–400 million per year for the 2026–2028 period, bringing the total package to approximately €1.1 billion. The expenditure will be covered by national resources but will be excluded from the ceiling on the increase in net primary expenditure set by the new European fiscal framework — up to 0.3% of GDP annually and up to 0.6% cumulatively through 2028. However, they will continue to count toward both the primary balance and public debt.
The Greek government had sought greater fiscal flexibility during negotiations with Brussels, estimating it could secure around €1.5 billion in fiscal space for the same period. The European Commission’s final proposal falls short of that figure, but it does allow significant projects to proceed without burdening the expenditure ceiling set by the new Stability Pact.
This new flexibility stems from the expansion of the scope of the national escape clause, which until now applied exclusively to defense spending. It now extends to measures that strengthen the resilience of the European energy system and accelerate the transition away from fossil fuels, giving member states greater room to push forward critical energy investments.
According to the Ministry of National Economy and Finance, the investments to be included under the escape clause will cover renewable energy storage projects, energy efficiency programs, building energy upgrades, and critical energy infrastructure that enhances the security and resilience of the country’s energy system. The final selection of projects will be made in the coming period in coordination with the relevant ministries.
Reports indicate that the selection of projects forming the energy component of the government’s TIF announcements will be completed by the end of August. These will primarily be mature, ready-to-implement interventions, designed to get underway immediately and deliver a strong development impact while simultaneously boosting energy security and expanding the share of renewable energy sources.
For the economic team, the energy escape clause represents yet another financing tool — complementary to the ESPA structural funds — as the Recovery Fund is phasing out, with the goal of accelerating investments that will reduce energy costs and strengthen the competitiveness of the Greek economy.
