The priorities of the economic staff after the government's reshuffle

Maintaining fiscal stability, further tax cuts for consistent taxpayers with a focus on the middle class, and faster absorption of the Recovery Fund funds for the implementation of critical reforms and investments are the key priorities of the Ministry of Finance for the next two years.
The change of leadership in the Ministry of Finance with the placement of Kyriakos Pierrakakis at the helm of the economy does not change the basic objectives of the government's economic policy, which will continue to be based on the strong dynamics of the Greek economy, the overperformance of the budget and the great opportunity that the 36 billion euros of the national program Greece 2.0 represent for the country.
The Ministry of Finance has a critical six months ahead of it, during which dozens of milestones and targets must be met in order to achieve the disbursement of additional resources exceeding 9 billion euros and concerning the 6th and 7th tranches of the Recovery Fund. This is a crucial step towards winning the great national bet of fully absorbing the funds of Greece 2.0 by mid-2026. By then, our country should have succeeded in absorbing the remaining 18 billion euros, as 18 billion euros have already been collected from the Fund. The prerequisite is that, from today until June 2026, the implementation of 240 remaining milestones to complete the program is completed.
The budget overperformance in January portends an exceedance of this year's primary surplus target, as happened last year, creating additional fiscal space for the further tax cuts announced by the government. This particularly positive development is being compounded by the Commission's plan for the defence spending escape clause from the deficit of member states. The Commission's final proposal is due to be announced on 19 March, at which time the exact percentage of defence spending that will be exempted from the deficit will become clear. In any case, with this exception, Greece, which spends almost 3% of its GDP on armaments programs, will benefit. The gain will be the significant expansion of fiscal margins for this year and the following years, which will be used to return the dividend of the growth of the Greek economy to consistent taxpayers and other broader categories of citizens.
Based on this data, the government is already planning the agenda of new tax cuts that the Prime Minister is expected to announce in September at Thessaloniki International Fair (TIF). The decisions are expected to be finalized in the coming months.
Among other things, the government's plans for changes in taxation include: 
- The implementation of a new tax scale with rates that will lead to relief for incomes up to 40-50,000 euros. These are incomes that define the middle class.
- The reduction of subsistence allowances
- The further reduction of contributions for employees and businesses, in addition to the planned reduction of 0.5% announced for 2027. 
Additional interventions are still being considered for a new reduction of  the Single Property Tax as well as for a reduction in the independent taxation of rents.

 

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