The focus of the economic agenda is on the tax cuts and support measures announced by Prime Minister Kyriakos Mitsotakis at the TIF for the next two years, according to investment firm Wood & Company. The package, estimated at €1.76 billion in 2026 (0.7% of GDP) and €2.5 billion in 2027 (0.9% of GDP), includes broad income tax cuts, support for families with children, relief for young people, and new pay scales for uniformed personnel.

Tax rates are reduced by two percentage points in almost all but the lowest and highest brackets. At the same time, a new scale with a lower tax rate (39% from 42%) is introduced for incomes of €40,000-60,000, while the top scale remains at 44%. The Prime Minister also announced significant relief for families with children: households with four children and an income of up to €20,000 are fully exempt from income tax, while smaller families will see significant reductions in rates.

Of particular importance is the relief for young people. Those up to the age of 25 will pay no tax on incomes up to €20,000, while for those aged 26-30 the tax will be just 9% instead of 20% in the €10,000-20,000 income bracket. In the periphery, VAT rates in remote areas are reduced and the complete abolition of ENFIA in small towns is progressing by 2027. In this way, the government is attempting to respond to both the demographic issue and the need to support the countryside.

The downward trend in debt

Despite the cost of the new measures, the strategy of fiscal discipline remains unchanged. Greece has consistently recorded higher surpluses than the targets – in 2024 on a cash basis the primary surplus reached 5.1% of GDP and in the first seven months of 2025 it had risen to 6.5%.

Thus, the debt is on a clear path of deceleration. From an all-time high of 212.8% of GDP in 2021, it has fallen to 152.5% in Q1 2025, with the government targeting 149.1% at the end of the year. Wood appears more optimistic, forecasting a further fall to 144.2% in 2025, 134.5% in 2026 and just 101.3% in 2030. If this scenario comes to fruition, the country will have reduced its debt by over 110 percentage points of GDP within a decade – cementing its return to a stable, investment-grade economy once and for all.