Hadjidakis: Success on the tax evasion front will determine the further reduction of tax rates

The six critical milestones of the Medium-term Fiscal and Management Plan 2025-2028 that the Greek government will submit to the European Commission were presented by Kostis Hatzidakis to the House Economic Affairs Committee.

The Minister of National Economy and Finance said that Ecofin will certify in the near future that:

– We will have a very significant debt reduction. From 207% of GDP in 2020-21 we will be down to 133.4% in 2028. We will not be the most indebted country in the EU after many years even before the crisis.

– We will have deficit containment well below the threshold that conditions want sending a message of stewardship and housekeeping.

– We will have primary surpluses at 2.4%.

– There will be sustained GDP growth. Nominal GDP will rise from 232 billion euros to 272 billion euros in 2028. And real GDP will grow in very positive terms within the Eurozone and the EU . We are already 2nd and we will continue because it is the only way to converge

– We will have a reduction in unemployment. We delivered unemployment at 18% and this year on average it will be 10.3% and in 2028 with conservative forecasts it will fall to 8.5%

– Wages will continue to rise and will be 950 euros in 2027. That said that is what we are doing. The same will happen with the average wage. It is already over 1,300 euros and will be 1,500 euros in 2027.

At the same time, Hatzidakis stressed that the front against tax evasion will also judge the further reduction of tax rates, explaining that tackling tax evasion and positive growth rates yielded a primary surplus for 2024 of 2.4% of GDP instead of the initial forecast of 2.1%.

“This year against a forecast of 2.1%, we will achieve a primary surplus of 2.4% despite one-off expenditure. We will achieve this for two reasons: growth and success on the front of tackling tax evasion. That is why we have a higher surplus. It is because of this that we managed to convince the European Commission to allow us to have a further possibility of increasing spending beyond what was initially proposed,” the finance minister said, adding at another point:

“Based on the key argument of the outperformance of the economy in 2024, we managed to increase spending for 2025 by €700 million from the amount proposed by the European Commission last June. And we managed to increase spending by €1.1 billion in 2026 and the following years.”

Hatzidakis also said that most of the increase in spending would be directed to operational spending in the areas of health, education and the armed forces (armament programes).

“We are not promising miracles. What we promise is measured and will be judged by the Parliament, the Bank of Greece, the European Commission and Ecofin,” Hatzidakis said.

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