The Greek economy is entering a four-month period of significant developments, starting with the package of tax relief and support measures expected at the Thessaloniki International Fair (TIF).
The period will include the country’s largest reduction in public debt through early repayments this year and in the coming years, as well as the possibility of further credit-rating upgrades during a new assessment cycle that will conclude in November.
Prime Minister Kyriakos Mitsotakis is expected to announce the government’s main economic policy priorities for the coming months, through the 2027 elections, during the first weekend of September at TIF.
He is also expected to present a strategic plan with targets through 2030 and measures covering key areas of the economy and society.
Government officials are currently finalising the measures. According to government sources, the package will focus on reducing tax and social-security burdens while supporting small and medium-sized businesses and pensioners.
Permanent measures supporting the middle class and vulnerable households will form a central part of the TIF package.
The government says the measures will follow the approach adopted at the three previous TIF events during its second term. Housing support, for example, featured in all three previous packages, while successive tax reductions focused particularly on families.
Growth and fiscal stability
Mitsotakis is expected to emphasise the continuation of policies supporting society while maintaining Greece’s fiscal stability.
Government officials describe this as the central balance of economic policy: strong economic growth and efforts to combat tax evasion generate primary surpluses, which the government can either return to society or use to reduce public debt further.
The government has already announced that it will increase its early debt repayments this year.
The annual amount will reach €13 billion, compared with the €8.79 billion initially planned.
Strong fiscal performance has made the higher repayment possible.
The figure includes €6.94 billion repaid in June against bilateral loans from the Greek Loan Facility (GLF), which Greece received during the debt crisis.
It also includes €2.5 billion in European Financial Stability Facility (EFSF) loans, a €1.2 billion reduction in treasury bills and the early repayment of a €2.2 billion bond loan that was due to mature in December 2027.
The government estimates that these transactions will generate a benefit of €2.6 million over the next seven years.
Credit-rating reviews begin in September
Rating agencies will consider these developments during a new cycle of assessments that begins in the next two weeks.
Canadian agency DBRS will publish its assessment on September 4, followed by Moody’s and Germany’s Scope on September 18.
DBRS and Scope currently place Greece at BBB, investment grade. Moody’s rates Greece one notch lower at Baa3.
Standard & Poor’s will publish its assessment on October 23, while Fitch will follow on November 6. Both agencies currently rate Greece BBB.
Economic analysts and market officials consider a further upgrade possible, particularly in light of the larger-than-expected reduction in public debt through early repayments.
The government’s latest debt-repayment plans could push Greece’s public debt below 110% of GDP by 2031, one year earlier than previously projected.
The government aims to bring the ratio below 100% of GDP by the middle of the 2030s.
Greece’s public debt ratio is expected to reach 136.8% of GDP this year, before falling below 120% of GDP by 2029.
What Greece announced at the previous three TIF events
A review of the previous three TIF events highlights the scale of the measures announced during the government’s second term.
2025
The government announced what it described as the biggest tax overhaul in decades.
The measures focused on families and young workers, including a two-percentage-point reduction in all tax rates for incomes up to €40,000 and the introduction of an intermediate 39% rate for incomes between €40,000 and €60,000.
The government also announced additional tax-rate reductions for families with children, eliminated income tax for people aged up to 25 earning up to €20,000 and cut the ENFIA property tax by 50% for thousands of small settlements with up to 1,500 residents. The government plans to abolish the tax in those settlements in 2027.
2024
The government announced 45 measures, including reductions in social-security contributions, the complete abolition of the business tax for self-employed professionals and the removal of the pension reduction that previously applied to working pensioners.
Housing measures also featured prominently, including the “My Home 2” programme and a three-year exemption from rental income tax for owners who made properties available for long-term leases.
2023
Among other measures, the government announced the restoration of salary seniority increments after a 12-year freeze imposed during the bailout period.
It also increased the tax-free income threshold for families with children by €1,000 and introduced measures requiring almost all retail and service sectors to accept electronic payments through POS terminals.
The government also announced support measures following the damage caused by Storm Daniel.
