The escalating tensions in the Middle East continue to send shockwaves through global energy markets, keeping fuel prices elevated and placing a heavy burden on households and businesses both in Greece and internationally. At the same time, the Greek government is closely monitoring developments and drawing up a contingency plan in the event that the crisis — and the conflict with Iran — shows no signs of de-escalation.
The central objective is twofold: either to head off new waves of rising costs in the coming months through targeted market interventions aimed at reducing the prices of essential goods, or to cushion the blow that high energy prices are inflicting on household budgets through tax cuts and relief measures — which remain a core pillar of the government’s economic policy.
The Prime Minister has already announced a new subsidy of 10 cents per litre on diesel fuel for August, while a broader package of tax cuts and relief measures set to be unveiled at the Thessaloniki International Fair (TIF) is being actively considered. Announcements on both fronts — prices and relief — are expected during the first week of September.
The first line of defence against the cost-of-living crisis
In other words, the first line of defence against the inflation being fuelled by the war with Iran includes emergency fuel price subsidies as well as direct intervention to bring down prices on supermarket shelves.
The second — and parallel — line of defence consists of tax reductions and relief measures targeting the vast majority of compliant taxpayers. Decisions on these tax cuts and relief packages are expected to be finalised in the second half of August, during high-level meetings between the economic team and Prime Minister Kyriakos Mitsotakis, ahead of formal announcements during the first week of September at the Thessaloniki International Fair.
Tax cuts
According to the scenarios currently on the table, the TIF package will include tax cuts for compliant taxpayers and the middle class, with particular emphasis on professionals and targeted support for vulnerable population groups, such as low-income pensioners and recipients of the guaranteed minimum income.
In recent public statements, Prime Minister Kyriakos Mitsotakis previewed tax relief for the middle class, with specific reference to the self-employed. The relief measures under consideration also extend to employees, businesses, property owners, and households struggling with the housing crisis. In addition, the economic policy package will include new minimum wage targets to be rolled out on a four-year timeline spanning 2027 to 2030.
On the fuel prices front, the government — through its relevant ministers — has made clear that further interventions with additional subsidies will continue if necessary. Regarding the broader front of essential consumer goods prices, negotiations are currently underway to reach an agreement between the government, industry, and supermarkets. Manufacturers have already begun submitting product codes to the Independent Market Supervision and Consumer Protection Authority, reflecting price reductions ranging from 5% to over 20%. This process is expected to run through the end of August and will be complemented by parallel action from supermarkets, with the goal of making price reductions visible on shelves from the beginning of September.
At the same time, the government remains on standby to intervene at the European level, pushing for emergency EU support measures should the Middle East conflict escalate further and deepen the energy crisis.
