The return of Kyriakos Mitsotakis after the short Easter break brought yet another surprise move, following the submission of the maritime spatial planning bill during Holy Week. In a continued effort to regain control of the political agenda, the government announced a new framework for permanent support to citizens living in rental housing, students, retirees, and people with disabilities. This is made possible due to the “explosive” performance of the 2024 budget surplus, which gives the government fiscal space for additional spending and a “social” dividend. Or as the Prime Minister phrased it in his speech yesterday: “The government cares, takes action, and continuously strives for a better life, aiming to turn numerical success into prosperity for the many.”

According to government officials, the announced measures are expected to benefit approximately 2.7 million citizens who will receive part of the benefits from the economy’s strong performance and the much-improved results in combating tax evasion. There is, of course, also political reasoning behind the Prime Minister’s announcements, as previously reported by protothema.gr. More specifically, Mr. Mitsotakis had been telling his associates for weeks that the government was seeking out-of-the-box solutions to tackle the housing crisis, given that many citizens were struggling to make ends meet—especially young people under 40 and students, as reflected in polling data held by the Maximos Mansion. Among this age group, New Democracy’s losses are disproportionately high compared to other demographic groups.

As for retirees, they remain a reliable support base for New Democracy, but they are also facing extremely high living costs. Retirees receive 12 pensions without bonuses and are often pillars of family budgets. Furthermore, many have not seen increases due to the “personal difference” clause of the Katrougalos law, which has not been phased out for all. In this context, supporting this group was deemed crucial by the government.

Why Now?
In response to criticism that the announcements were made prematurely (instead of at the traditional platform of the TIF), government officials said that fiscal space must be created first and then distributed in the form of a social dividend—without disrupting fiscal stability. According to the same sources, the new fiscal rules of the EU allowed the additional surplus to be utilized this year, which led to the decision for permanent measures in favor of the critical social groups mentioned.

At the same time, government insiders emphasize that the revenue overperformance is not a coincidence, but the result of deliberate policies. The announcement was reportedly coordinated between the Prime Minister and Deputy Prime Minister Kostis Hatzidakis—who has championed the fight against tax evasion—as well as with the new Finance Minister Kyriakos Pierrakakis, who traveled to the IMF’s Spring Meetings armed with this positive fiscal news.

Date at the Thessaloniki International Fair
Support measures for citizens won’t stop here. Kyriakos Mitsotakis has set the stage for further announcements at the Thessaloniki International Fair, concerning policies to be implemented starting in 2026. In Thessaloniki, announcements are expected on income tax brackets, with a possible reshaping of the scale, including the introduction of intermediate tax rates (e.g., between the current 9% up to €10,000 and the 22% that kicks in just above that).

Government sources also believe that self-employed professionals—who were impacted by the presumed income tax—will benefit too, depending on the economy’s trajectory. Still, they reject any “money tree” mentality, stressing that these are not handouts or benefits, but rather a return on society’s sacrifices, made possible by the solid performance of the economy and the improvement of all key indicators.