A comprehensive package of emergency and permanent support measures worth a total of €500 million, focusing on pensioners and tenants, is being announced today by the government, driven by the 2025 primary surplus that reached new record levels. Based on data to be published by Eurostat, the primary result is expected to approach 4.8% to 4.9% of GDP, approximately €12.2 billion, significantly exceeding initial forecasts of 3.7% of GDP or €9.1 billion. This development creates additional fiscal space exceeding €3 billion, however the amount that can be utilized for supporting vulnerable groups and new tax cuts is much smaller due to restrictions imposed by the Stability Pact and is in agreement with European institutions.
Emergency measures with “buffers” for the energy crisis include the extension of fuel subsidies through May, as well as continued support for fertilizer purchases and discounts on ferry tickets. The possibility remains open for a new fuel pass-type intervention, which expires at the end of May, while electricity bill subsidies – the so-called Power Pass – are also on the table, although reservations are expressed about this particular measure.
Regarding permanent interventions, an increase in income support from €250 to at least €300 is being considered, with parallel expansion of beneficiaries, as today the measure affects approximately 1.4 million citizens – pensioners over 65 years old with annual income up to €14,000 (single or widowed) or up to €26,000 (married or in civil partnership), uninsured elderly and people with disabilities. However, it’s not ruled out that there could be a surprise move from the Prime Minister either with an increase in rent rebate above the current limit of €800 or with some new tax relief that was originally intended for the Thessaloniki International Fair, but is being accelerated due to the political climate.
The package of measures to be announced today essentially constitutes the first wave from the overall package expected to be completed in the coming period, on the road to Thessaloniki. The planning includes tax cuts for businesses, with scenarios such as reducing advance tax payments and lowering the corporate rate from 22% to 20%, as envisioned in New Democracy’s 2019 program. Also on the table are the abolition of the professional tax and a new “lifting” of the taxation presumptions for freelancers. In parallel, a reduction or even abolition of the special solidarity contribution for pensioners is being considered. The solidarity contribution is a progressive withholding imposed on main pensions above €1,400 gross with the purpose of financing insurance fund deficits. The contribution is withheld monthly and varies according to the pension amount, reaching up to 14% for high pensions, while a separate contribution is also imposed on supplementary pensions.
