In a televised interview, Greece’s Ministry of National Economy and Finance, through Minister Kyriakos Pierrakakis, set out the rationale for the government’s Thessaloniki International Fair package, highlighting a shift in income taxation towards family status and age-based relief for young people rather than economy-wide value added tax cuts. The minister framed the package as constrained by EU fiscal rules and a capped fiscal space of EUR 1.76bn for 2026, while referring to measures reaching EUR 2.5bn on a weighted-average cost basis in 2027. He cited a Bank of Greece study estimating that only 19% of a VAT reduction is ultimately passed through to consumers, and argued this supported directing support via income tax reductions to families with children, third-child and large families, and young people nationwide. VAT reductions were justified for border islands and small islands (up to 20,000 residents) where an EU directive allows differentiated treatment, alongside a stated objective of supporting locally owned businesses in those areas. He also contrasted the estimated EUR 400m cost of indexation proposals with EUR 1.6bn for the government’s rate reductions, and referenced earlier business tax reductions (corporate income tax from 28% to 22% and dividend tax from 15% to 5%), while noting the income tax changes would also cover farmers. He indicated the measures were being brought forward for a vote, with households expected to see the impact from 1 January 2026.

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