Greek prime minister announces tax relief as economy improves

After years of financial crisis, the Greek economy has improved so much that the prime minister announced €1.7 billion ($2 billion) in extensive tax relief measures and noted that Greece now has better bond market conditions than France.

In comments made on Saturday evening during the opening of the country’s most important economic fair in the port city of Thessaloniki, Greek Prime Minister Kyriakos Mitsotakis highlighted falling unemployment rates, growing investments, and an improved fiscal situation. He noted that the national deficit has significantly decreased.

“The former crisis country now shows one of the highest economic growth rates in Europe,” he said.

Unemployment has dropped to just 8% — a stark contrast to the peak of the financial crisis when it reached 28%, with youth unemployment then at 60%.

Starting in 2010, Greece was on the brink of bankruptcy and risked being kicked out of the eurozone. The country survived the crisis only with the help of an international bailout.

The last austerity and reform programme ended in 2018. However, Greece still has the highest debt-to-gross national product (GDP) ratio in the European Union, exceeding 150%.

Favourable bond rates

Despite this, Greece now compares favourably within the EU. Mitsotakis symbolically pointed to the interest rate gap with France: In 2015, Greece had to borrow at 9.18%, while French government bonds were at 1.16%.

Today, Greek 10-year bonds stand at 3.33%, below France’s 3.44%.

Thanks to the stable fiscal situation, Mitsotakis announced targeted relief measures: Families with children will pay significantly less income tax, and in many cases, none at all. Young people under 25 with incomes up to €20,000 will also be exempt from income tax entirely.