Μake us preferred on Google The government spent months preparing the package of tax cuts and spending measures unveiled at the Thessaloniki International Fair (TIF) by the Prime Minister on Saturday and it settled on returning more than 2 billion euros to the public. The political choice was deliberate. Rather than disperse the money to one or two larger groups, the government spread it across as many constituencies as possible. Pensioners, public sector employees, farmers, the self-employed and families were all promised something.
It was a strategy of a little bit for everyone, and it is now producing the government’s first real headache. Early reactions from the very groups the package targeted suggest the sums involved were too modest to generate the political payoff that the prime minister’s office, appears to have expected.
An insider’s warning
Ioannis Bratakos, president of the Athens Chamber of Commerce and Industry (EBEA), is a voice that carries particular weight in this debate. He previously served as deputy minister to the Prime Minister Kyriakos Mitsotakis and as General Director for New Democracy for over three years and has an insider’s view of how government policy gets made. Bratakos acknowledged the measures were headed in the right direction but said they fell short of what businesses had expected. “We are not fully satisfied,” he said, pointing to the absence of a promised 120 installment scheme that would let businesses settle overdue tax and social security debts.
He was also skeptical that the advance tax payment, a levy on estimated future income long criticized by self-employed workers and businesses alike, would come down anytime soon. The rate has stood at 80% since the bailout years, a level many in the business community consider punitive.
That is precisely the problem with the government’s planning. Tax relief can be genuine, but it does not necessarily address what a citizen or a business considers urgent issues. Officials with knowledge of administrative law pointed to a related example, the government’s system for taxing presumed income among the self-employed. A large share of self-employed workers do report low income on paper, yet the government never prioritized tools such as electronic invoicing and point of sale interconnection that could have reduced this type of tax-evasion directly. Instead, it applied that blanket measure across the board before putting targeted verification tools in place. The consequence, these officials said, is that the sector as a whole is treated as though it were evading taxes, while their liquidity is severely strangled.
Self employed workers voiced a similar frustration, centered on that same presumptive taxation system and the rising cost of living. Giorgos Kavvathas, president of the Hellenic Confederation of Professionals, Craftsmen, and Merchants, known as GSEVEE, spoke of disappointment and anger, saying the measures failed to address the fundamental pressures facing small enterprises.
Farmers focus on costs, not just taxes
Farmers are focused on more than what they will pay in taxes. Sokratis Aleiftiras of the Federation of Agricultural Associations of Larissa emphasized production costs and state arrears still owed to farmers, including overdue compensation payments.Dimitris Kapounis of the Union of Agricultural Cooperatives of Naxos put it more bluntly. “Farmers do not live off the tax office,” he said. “They live off the field and their herds.”
“Crumbs” for public workers, a “cold shower” for pensioners
Pensioners were harsher still. Stathis Anestis, president of the Panhellenic Association of OTE Pensioners, called the measures a “cold shower.” He said a single payment of 400 euros cannot substitute for a permanent increase in income, and he reserved his sharpest criticism for the treatment of widows’ pensions.
In the public sector, Dimitris Vrysalis, president of the Union of Employees of PAGNI, the University General Hospital of Heraklion in Crete, dismissed a promised 500 euro payment as “crumbs” and “a mockery,” reviving longstanding demands for the restoration of a 13th and 14th month salary. Not every public sector group was as critical. The Union of Judges and Prosecutors welcomed the announcement, calling it a first step toward addressing its own demands.
Great Expectations
The underlying problem is not that the government failed to deliver anything of substance. But rather that the Greek society is clamoring for something more substantial and wide ranging than temporary and fairly minimal relief. It wants solutions to problems that have been piling up, problems that the current term has only made more visible: high prices, rising production costs, debts, delays in state services, a sense of injustice and corruption cases that have weighed on public trust.
Nearly every group that reacted to the announcement made the same point, that the measures fail to address the wave of high prices already sweeping through households, a concern sharpened by forecasts that diesel fuel could exceed 1.70 euros a liter this winter.
The government’s problems are also compounded by the fact that New Democracy has been in power for seven years now and the expected fatigue that comes along with it. The feud between current Prime Minister Kyriakos Mitsotakis and former Prime Minister Antonis Samaras, who hails from the same party even though he was expelled in 2024, has also taken its toll and inflicted lingering damage. All of the above have contributed to a general culture of distrust and skepticism.
The TIF package may well be fiscally generous, but its first test will be whether the wider public feels their lives have genuinely changed for the better. The mood, at least as far as early reactions go, suggests that the government has a way to go to win this bet.
For a government that has invested heavily in the TIF package of measures that it just announced, that may be the hardest lesson of all. Spreading money thinly across many groups can still cost dearly in political capital when everyone expected more.
Source: TO BHMA
