Greece announces €1.6 billion tax-cut package targeting 4 million citizens

Greek Prime Minister Kyriakos Mitsotakis on Saturday unveiled a €1.6 billion tax-cut package he said will benefit about 4 million citizens, announcing the measures in his keynote policy speech at the Thessaloniki International Fair.

Mitsotakis described the package as aimed at boosting incomes across a range of groups, including the middle class, younger workers, large families and pensioners. He said the reductions will be included in Greece's 2026 national budget, which must be approved by Parliament.

Mitsotakis framed the speech around delivering relief after a year in which he had told Greeks he did not arrive "with a bag full of gifts." The package, he said, will be limited by fiscal constraints imposed by the European Union but can be afforded thanks to better-than-expected tax revenues and a primary budget surplus — a measure that excludes interest payments on debt.

The announcement continues a long-standing Thessaloniki tradition in which the Greek prime minister outlines the government's economic priorities for the coming year. The measures come as Mitsotakis and his center-right New Democracy party prepare for a national election that must be held by July 2027.

Officials did not provide a detailed line-by-line breakdown in the speech, but Mitsotakis listed the intended beneficiaries and said the package aims to spread support widely rather than concentrate it in narrow constituencies. He said stronger-than-expected fiscal performance this year created the room to propose the cuts while respecting EU spending rules.

Economic policymakers in Athens have in recent years faced competing pressures: the legacy of deep austerity measures imposed after Greece's debt crisis; commitments to fiscal targets agreed with European partners; and domestic expectations for higher living standards and tax relief. The government has presented recent improvements in revenue and a primary surplus as evidence of a stabilizing public finance picture that permits limited tax relief without breaching EU fiscal commitments.

Parliament will review the draft 2026 budget, which will incorporate the announced tax measures, in the months ahead. If approved, the reductions would take effect in the coming fiscal year and be visible in tax bills and social transfers paid to the targeted groups.

The speech at Thessaloniki is often used by Greek leaders to set the policy narrative for the year. Mitsotakis's presentation combined elements of economic messaging with political positioning as the country moves toward the next national vote.