In his annual Saturday address in Thessaloniki in northern Greece, Prime Minister Kyriakos Mitsotakis laid out new support aimed at those feeling the pinch from high prices. "If we have so far managed to get on the right track in all fields, the time has come to significantly accelerate," he said, adding that stronger headline numbers should be felt in everyday household budgets.
The package targets multiple groups, including independent workers, retirees, agricultural producers, and households with many children. Among the headline measures are lifting the minimum wage from €920 to €1,000 starting in January 2028, providing public-sector staff with a yearly €500 Christmas bonus, and trimming social contribution rates for private-sector employees by 0.5 percentage point. For parents with three children, the first €20,000 of earnings would be free of income tax. Mitsotakis said the steps will comply with European budget rules and won't jeopardize Greece's fiscal footing.
Officials expect the 2026 budget to beat targets again, creating space for tax cuts and cash support across many groups. Combined with sizable cash reserves, that outperformance has allowed early debt repayments that authorities say should bring Greece's public debt below Italy's by year end.
On Friday, Morningstar DBRS raised Greece's outlook to positive from stable and kept the sovereign rating unchanged at BBB. The firm noted, "While current political polls point to a potentially difficult period of government formation after the upcoming parliamentary election next year, Morningstar DBRS views policy risk as limited as there is a broad consensus among main political parties on key policy topics."
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Mitsotakis, in his second term, said the country is only a few months away from a national vote next year, with living costs topping voter concerns in surveys. Polls show his center-right New Democracy party in first place with a clear lead, but it appears short of the numbers needed for a single-party government. With politics highly fragmented, building a coalition looks hard right now, and investors and rating agencies are watching the outcome closely.
If these measures land as planned, some households could see extra breathing room while Athens argues it is keeping within fiscal guardrails. A stronger outlook from a ratings firm plus potential debt relief can support borrowing conditions, but a complicated post-election setup adds uncertainty. Put together, the policy mix and the politics will filter into inflation, growth, and the price of credit that shows up in savings rates, mortgages, and how local businesses plan and hire.
