The Multi-Year Fiscal Program 2026-2029 outlines the government’s direction for new public sector hiring, as well as salary and pension increases through 2029. The program was presented to the Cabinet last Thursday by Minister of National Economy and Finance Kyriakos Pierrakakis and Deputy Minister Thanos Petralias.
Although it extends beyond the narrow timeframe of one government term, the Multi-Year Fiscal Program has become an institutional obligation for the country. It is the first to be drafted under the new fiscal rules that came into effect across Europe and will henceforth accompany the submission of the state budget every November. It essentially serves as the starting point for economic policy, as countries now draft four-year budgets, thereby securing the “green light” from Brussels that they are not deviating from the framework set by fiscal rules and the Medium-Term Program approved by the Commission for each country.
Multi-Year Program: new measures debut in 2026
Starting with new measures to be implemented for the first time in 2026, with the goal of raising the average salary in the country to €1,500 and the minimum wage to €950 in 2027, the 80-page Multi-Year Program outlines continuous salary and pension increases each year, further unemployment reduction, and more than 148,500 new public sector hires by 2029.
According to the Multi-Year Fiscal Program (MYP 2026-2029), with all the fiscal interventions that have been legislated and planned from this year for the four-year period 2026-2029, the State Budget will contribute over €10 billion to citizens’ incomes. Compared to 2024, this benefit breaks down annually as follows: €3.04 billion for 2025, increasing to €5.94 billion in 2026 (additional benefit of €2.9 billion compared to 2025), to €7.94 billion in 2027 (additional €2 billion compared to 2026), to €9.01 billion in 2028 (additional €1.07 billion compared to 2027), and a total of €10.1 billion in 2029 (additional €1.09 billion compared to 2028), based on current fiscal margins.
148,533 new hires
In the five-year period 2025-2029, 148,533 hires are projected in general government entities, compared to 109,540 departures from the public sector. In 2026 alone, 35,840 hires are projected, beyond the 31,434 expected to be hired by the end of 2025, according to MYP 2026-2029. The new positions will thus far exceed the 1:1 rule (one hire for every departure) and will be implemented in waves: 26,875 hires in 2027, another 26,875 in 2028, and an additional 27,277 in 2029, against an annual rate of 21,644 departures during the same period.
However, these projections only concern already planned hires that have been designed and budgeted so far, without including others that may be determined in the future, based on state needs and budget capabilities.
Increases above inflation
Meanwhile, across both public and private sectors, employment growth, unemployment reduction, and income increases that are projected to exceed inflation are anticipated. The average nominal salary of employees, as declared by employers to ERGANI, will reach €1,500 in 2027, from €1,342 in 2024, with an intermediate “stop” at approximately €1,440 in 2026.
The minimum wage, currently at €880, is projected to increase gradually to €915-920 (the final amount will be announced in April 2026) and to €950 in spring 2027. Similarly, public employees will receive a new horizontal increase in 2026, equal to that announced for the minimum wage, representing an additional €360 million. At the same time, unemployment is projected to fall to its lowest rate since 2008 (8.6% in 2026), recording a 50% drop within a few years (from 17.3% in 2019).
These increases are calculated on nominal wages. However, from 2026 something changes: due to the reduction in taxes and contributions that begins to be implemented from January 1st, the net take-home pay that millions of workers receive will increase.
According to MYP data, compared to this year, 2026 is expected to see a 5% increase in “net” average wages after taxes and contributions, compared to 2025, an increase more than double the inflation rise expected not to exceed 2.2%.
Evolution of Key Employment and Income Indicators 2019-2026
SOURCE: Ministry of National Economy and Finance, MYP 2026-2029
What comes next
The plan to strengthen real incomes does not simply stem from social need or pressure, but is part of the government’s strategy to achieve the developmental and fiscal goals it has set in the economic field.
As emphasized in the Multi-Year Program, “the implementation of permanent income support policies, which is achieved within fiscal targets, concerns the vast majority of citizens and leads to improved household purchasing power and support for domestic demand with a permanent impact on disposable income. In 2026, private consumption is expected to increase by 1.7%, leveraging income policy interventions for the private and public sectors, positive developments in the labor market, de-escalation of inflation rates, and strengthening of consumer confidence.”
How is this reflected practically in the future of wages and employment?
According to the Multi-Year Fiscal Program 2026-2029:
* For “gross” employee wages, based on ERGANI data, the average salary in the country is already moving almost 30% higher than the corresponding 2019 level, while for those paid the minimum wage, in 2025 it moves 35.4% higher and in 2026 the increase will exceed 40%, while in 2027 it will approach 50% reaching €950 gross.
* For the money that goes “in the pocket,” while average net wages of workers in the country increased from 2019 to 2025 by 26%, in 2026 the increase will reach 32.3%. From 2024 onwards, increases appear to be “running” steadily at rates of about 5%-6%.
The paradox is that, considering the price increases that during the same period (from 2019 onwards) have increased by a total of 19.5% and in 2026 will increase further to 22.1%, the comparison with wages shows that corresponding increases in net employment income are cumulatively almost 50% greater than the rise recorded by official inflation (32.3% per capita “net” income versus 22.1% inflation)!
Therefore, if wages and income increases for workers were adjusted automatically based solely on the course of official inflation, without all these measures or interventions being applied over all these years – or without the economy and employment having developed the dynamics they have – then the “net” salary of the average worker in the country would have increased by 10 percentage points less than what is projected to reach in 2026, while the minimum wage by 18 percentage points less.
€14 billion “package” for pensions through 2029
For retired workers, correspondingly, the pension allocation is projected to increase each year by approximately €1.4-1.6 billion. Pension expenditure is expected to increase from €34.3 billion in 2025 to €40.1 billion by 2029. Compared to what they receive so far, the increases coming for pensions in the four-year period 2026-2029 will cumulatively exceed €14 billion. This expenditure incorporates the cost of annual pension adjustments and the gradual elimination of offsetting pension increases against retirees’ personal differences.
Specifically with this change, 2026 will be the first time in 15 full years that 671,000 retirees will receive 50% of the increase that others have been receiving in recent years. While from 2027 onwards, they will receive it at 100%, like everyone else. Additionally, another 1.4 million low-income retirees over 65 with income up to €14,000 (single) or €26,000 (married) will receive an additional €360 million annually each November as a social support of €250 which they received for the first time last week.
SOURCE: Ministry of National Economy and Finance, MYP 2026-2029
From 2027 onwards
The Multi-Year Plan incorporates interventions beginning from 2027 onwards. Apart from the complete elimination of pension increase offsetting with personal differences, other new measures to be implemented for the first time include:
- complete abolition of ENFIA (property tax) for primary residences in settlements with populations up to 1,500 inhabitants from 2027
- reduction of insurance contributions by an additional half unit from 2027
- significant reduction of the final tax paid by freelancers, in tax returns to be submitted for 2026 earnings
- significant tax reduction or complete exemption in 2027 returns for property owners who rent out properties that were previously vacant
