Mitsotakis: We are on the right track to reduce the gap between Greek and European incomes

Prime Minister Kyriakos Mitsotakis mentioned the 2025 Budget at length in his regular Sunday post on the week’s report.

The prime minister referred to a budget “with a social dimension, fiscally responsible and almost balanced”, noting that it “includes 12 salary increases and 12 tax cuts, predicts growth of 2.3%, promotes institutional measures that focus on strengthening investment and innovation, addressing the demographic and housing issues, spending on National Defence, and addressing the challenges of climate change”, and concludes that: “We are on the right track and with hard work, patience, and perseverance we will close the gap between us and European incomes.”

He also referred to implementing policies “for “cheaper housing and more competition in the energy market” and the issue of repairing the damage to the apartment building in Ambelokipi.

Kyriakos Mitsotakis’ post

The details of what Kyriakos Mitsotakis said in his Sunday post:

What he says in his statement.
Good morning to all. This is the last Sunday of November, and as we approach December, two things are happening: first, Christmas is approaching, and second, we are discussing the state budget!

So that’s what I’ll start with, as the final draft of the 2025 state budget has been submitted, with provisions that make our economy stronger and more resilient in these turbulent times. I won’t bore you with too many numbers, after all, there will be extensive analysis during the debate in the House from December 11 to 15 – we’ll be here to talk about it. I will just point out the following: it is a budget with a social dimension, with permanent, positive interventions for citizens and businesses increased by EUR 1.1 billion compared to the 2024 budget. It includes 12 pay rises and 12 tax cuts; it forecasts growth of 2.3% – significantly above the EU average for another year; it further houses the public debt – I will say more about this below; it promotes institutional measures focused on boosting investment and innovation, addressing the demographic and housing issue, spending on national defense, and addressing the challenges of climate change.

It is a fiscally responsible, almost balanced budget! Prudent financial management has ensured a larger primary surplus of 2.5% of GDP (€6 billion) compared to 2.1% of GDP (€5 billion) originally estimated. Curbing tax evasion combined with rising wages and lower unemployment led to an increase in total tax revenues in 2024 of EUR 3.7 billion well above our target (66.7 billion against a target of 63 billion). This money has already been returned to society by increasing public investment in critical infrastructure projects, strengthening health, and education, and supporting the weakest. The results have been spectacular in terms of reducing the VAT gap (from 29.1% in 2017 it has fallen below 14%, to reduce it to European levels, to 9% by the end of 2027). This performance demonstrates that the digital tools developed – such as the POS-cash interface and the myDATA platform – to reduce tax evasion are working. In 2025, this effort will be intensified with new tools and services (for example, the digital customer portal, the extension of the e-invoice, the digital delivery note, interoperability with the Land Registry, etc.) that will complete this major tax reform, which has justice at its core. More modernization of the tax administration means more tax and social justice, better service to the citizens, and of course more room for further tax cuts.

I will focus, as I said, on the rapid debt reduction. In December we will complete the new early repayment of €7.9 billion of loans from the first memorandum and in 2025 – barring a contingency – we will pay another €5 billion to repay loans scheduled to mature between 2033 and 2042. This means that debt next year will fall to 147.5% of GDP, the lowest level since the start of the crisis in 2010. The rapid reduction in government debt is also passed on to the lending rates of the government and the private sector, i.e. businesses and households. Lower borrowing rates mean more investment, more employment, and higher wages.

In closing, I want to say that I know very well that households are not yet feeling this good course of the economy in their daily lives. The wave of accumulated inflation has, as in other countries, gnawed away a significant part of the increases we achieved in incomes. Rent and electricity are squeezing the family budget. But we are implementing policies for cheaper housing and more competition in the energy market. And the increases in wages and pensions are permanent, while inflation is transitory – and already significantly lower than in the previous period. With tidy public finances, pro-investment reforms, support for labor, reduced bureaucracy, digitization of the state, increased productivity, and more effective competition, we are creating day-by-day an economy that offers more opportunities and better wages for all. We are on the right track and with hard work, patience, and perseverance we will close the gap between us and European incomes.

On Friday I met with the residents of the apartment building on Arkadias Street in Ambelokipi that was damaged by the explosion of the improvised device in the 4th floor apartment. The building, based on the estimates of the Technical Inspectorate, is not habitable in its entirety and its restoration will take about a year. As part of the state assistance, 29 of our fellow citizens are being temporarily accommodated in a hotel, where they will remain until the beginning of the New Year. They will then be able to choose whether to stay free of charge in the St. Andrew military camps until March 2025 or receive the special housing allowance we will introduce for those who have no alternative housing. At the same time, with the sponsorship of the construction company TERNA, which we thank, there will be a complete restoration of the building’s stability so that it can be reoccupied. Also, whoever and whichever of the tenants wishes to do so, will be provided with free psychological support. We are firmly and unequivocally opposed to the phenomenon of terrorism and its terrorist perpetrators. We support their victims and those harmed by their heinous actions.

I continue with the issues of regional cohesion, with particular emphasis on Evros, which is a special priority for us. Our plan for the region is reinforced by 3 new actions of the Public Employment Service with a total budget of 18.5 million euros, to create 600 new jobs, which can include unemployed people of all ages. The first action concerns the recruitment of unemployed people in full-time positions, with a subsidy of up to 75% of the salary and contributions, for a period of up to 18 months, and is addressed to all enterprises in the Regional Unit of Evros. The second enables 200 unemployed people of all ages to set up their own businesses, with a subsidy of EUR 14 800 per business for 12 months. The third is for 200 unemployed 18-30 year olds, allowing them to gain professional experience in dealing with the consequences of climate change. The CIPA will directly pay the minimum wage (with full social security contributions), as well as a proportion of holiday bonuses and holiday allowance.

Greece is now a serious investment destination for major foreign investors, and this is confirmed by the two new major foreign direct investments from multinational giants that will be made. The first investment is from the French Data4, which will build a data center campus in Peania, with an investment of 300 million euros, which is expected to be operational in 2027. This project is part of a wider investment program worth €7 billion until 2030. Greece’s choice was based on its two comparative advantages: its geographical location, which brings it close to the Middle East and Asia, and access to cheap, clean, renewable energy, essential for energy-intensive data centers.

The second major investment is Amazon’s three new large-scale wind farms in northern Greece, which are expected to be completed in the next two years, also leveraging resources from the Recovery Fund. This is a €1 billion investment that will contribute to the national target of increasing the share of our electricity generated from renewables to over 80% by 2030 – and possibly exceeding it. Opposition to renewables, which are directly linked to our energy self-sufficiency and autonomy, but also to lower electricity prices, is ultimately an act that does not serve the national interest. And it is interesting politically that it is expressed primarily by parties that usually present themselves as super-patriots. I would like to take this opportunity to tell you that you can get real-time detailed information on the volume of energy produced by all renewable energy sources in every region and regional unit of the country, through the new application https://apps.deddie.gr/apedata/ of the DEDDEO.

One of the changes we need to make today to better build tomorrow is our Island Resurfacing Fund, which I spoke about on Thursday in Naxos, one of the islands of the Cycladic archipelago that we want to “green”. This fund is essentially a large piggy bank that will be gradually filled next year with money from industries and other sectors to compensate for the pollution they cause. We estimate that these funds will exceed EUR 1.6 billion, depending on the fluctuation of pollutant prices and the mobilisation of private resources. But what does this mean in practice for residents? Electricity without interruptions or voltage fluctuations, cheap and clean for households and businesses from the wind, sun, and sea, and away from polluting and expensive oil. The photovoltaic, wind, and hydroelectric plants that will be created – depending on the carrying capacity of each island – and financed by this fund will not only provide electricity to homes, hotels, shops, and public buildings but will also power farms – particularly important for small-scale farming – and local dams to tackle water scarcity. Some ports will also have charging stations for ships, as the next day of shipping will be electric. A network of an additional 1,000 chargers will be spread out to boost electric vehicles. Almost 2/3 of the total resources of the new fund will be directed to interconnections between the islands and the National Energy Transmission System. At the same time, all Greeks will benefit, as the charges for the electrification of the islands will be eliminated from their bills. But also the country as a whole, since the reduced production costs of the products will bring a reduction in their prices. The carbonization of the islands will therefore be the key to their development, providing cheaper electricity, boosting tourism, and protecting the environment and the atmosphere.

We have news about the Fair Development Transition Program 2021-2027 being implemented in Western Greece and in the areas where the PPC’s lignite power plants used to operate. Six investment projects by large companies and 676 investment projects by existing or new micro and small enterprises were approved for funding. The budget for the latter is around €57.7 million, of which around €40.2 million will be a grant from the Programme. A total of 1,685 jobs will be created, while the inclusion of additional investment projects for SMEs is expected to create an additional 2,300 new jobs.

And from one end of Greece to the other. We are proud that our outlying island of Tilos has won the first European “Just Go Zero” award as a model for solid waste management. There were 420 nominations and the Greek island made it to the final three along with Austria and the Netherlands. However, Tilos’ pioneering waste management program not only made it first in its category but also earned it the winner of all winners, the “Grand Jury Prize”, with the Commission representative praising the achievement of small Tilos.

From environmental issues, I move on to the very important bill of the Ministry of Health submitted to the Parliament, which provides incentives to attract doctors and dentists to health structures in the so-called arid and problematic areas. We significantly increase the financial incentives, while providing institutional incentives. What are these? Transferring them after 3 years of service in these areas, instead of the 5 years that they have been serving until now, a more favorable calculation of their service for faster advancement to the next grade, an increase in the additional days of training leave for their scientific development and the possibility of co-service for civilian administrators who are spouses or partners of NHS doctors. Already, however, with the financial incentives we introduced in the summer, we have succeeded in filling 201 of the 293 vacancies that existed. We are proceeding immediately to re-post the remaining 92 vacant organic posts and we believe that within the first quarter of 2025, we will fill them. As the Minister of Health rightly says, “While some people keep seeing problems, we are finding solutions.”

The next item in today’s review is the Gigabit Voucher programme with a total budget of €80 million with funding from the Recovery Fund and Public Investment Programme. At least 379 thousand households and small and medium-sized enterprises are gaining access to connections with speeds of at least 250 Mbps. Beneficiaries are provided with a voucher worth €200, covering part of the initial connection and subscription costs for 24 months. Applications can be submitted on the platform https://gigabit-voucher.gov.gr/go-beyond/. Beneficiaries are not subject to income criteria, but they must not already have a connection with a speed of more than 100 Mbps and must reside or operate in the areas covered by the program. Despite Greece’s lagging in telecommunications infrastructure, our country is making significant progress. From zero availability of fiber optic networks in 2019, we have now reached 50% coverage, with a target of 60% by 2025. Investments by private operators are expected to exceed €4 billion over the next two years, with the aim of creating more than 6 million new lines, bringing coverage to 80% by 2028, very close to achieving the target set by the European Digital Decade 2030 strategy for universal availability of ultra-high-speed networks.

Two more “digital” news. I’ll start with the most useful one. Writing a responsible declaration via gov.gr becomes even easier, as we will now be able to dictate to the AI personal assistant the text we want, and with a click we will have it ready to be filled in on our screen. Item two, contracts have been signed for Axis 3 of the “National Microsatellite Programme”, i.e. the development of a Government Hub for the processing and dissemination of satellite data. You may be wondering what good this will do us. In short, through this system, specialized services and products will be provided in five different sectors: agriculture, forests, water, land, and security. As I have mentioned before, the implementation of the project will be done by Greek companies which means jobs with prospects for advancement.

Within the week was the International Day against Child Abuse, a scourge with many causes that often hides behind the closed doors of homes, seemingly above suspicion. Child abuse is constantly changing facades, often taking advantage of the anonymity provided by technology. We cannot – unfortunately – completely eradicate the phenomenon, but we are making every effort to reduce it. I am taking a brief stock of our initiatives. Firstly, we have moved towards a clear definition of child abuse, ensuring that the framework for tackling the phenomenon is clear and effective, we have strengthened de-institutionalization, introduced the White Criminal Record as a prerequisite for working with children, supported specialized structures for abused children and launched the 1107 freephone line and the new Safe Youth app. We will continue to take every appropriate measure to protect our children from all forms of abuse.

Last item for today: The clearing of the electoral rolls has begun, a process that is being done for the first time in our country so that there is a true reflection of the electorate and therefore an accurate determination of voter participation and abstention in each election. The clearance of the electoral rolls, which is now becoming easier due to the digitization and interoperability of public registers, will contribute to the better functioning of the State. And to forestall the suspicious, no there is no possibility of early elections. The next national elections will be in 2027, which means we have two and a half years of clear political time to implement our commitments.

I will leave you somewhere here. See you next Sunday, when I’ll have my impressions of the new Thessaloniki Metro. Have a good Sunday!

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