Greek Prime Minister Kyriakos Mitchellsotakis announced on Saturday (10 September) that the minimum wage would rise next year and that pensions would go up for the first time in more than a decade since the financial crisis.
In return for severe austerity measures, including a series wage and pension cuts, the euro zone’s largest indebted country received over €260 billion in international loans between 2010-2015.
After its third bailout, Greece was able to exit its creditors’ enhanced surveillance last month. This gave it more freedom in implementing its economic policy.
Mitsotakis stated that pensions would increase over 1.5 million pensioners after many years during his annual economic speech in Thessaloniki.
Mitsotakis is a conservative candidate for parliamentary elections in 2023. He stated that the increase in pensions would be indexed to both GDP growth and inflation.
He said that the minimum wage, which was raised by the government to €713 ($716) in March, would be increased again in May without revealing a new figure.
He also stated that his government would abolish the so-called solidarity tax on public and private sector workers. This was a legacy from Greece’s multiyear debt crisis.
Mitsotakis also pledged additional funding to offset the effects of the energy crisis, and the soaring inflation on households.
Since last year, Greece has spent approximately €8bn ($8bn) on power bill subsidies and other relief actions.
Mitsotakis stated that support will continue with low-income earners receiving a €250 handout in December.
He said that 1.3 million households will be eligible for more financial assistance for heating in the winter. Those who use oil or other fuels instead of electricity or gas will get twice the benefit.
He stated that all the measures he has announced for this and next year will total €5.5bn.
The government is leveraging strong growth due to higher-than-expected tourist revenue this year to continue funding power bills subsidies.
Mitsotakis stated that the Greek economy is expected to grow by more than 5% in 2019, higher than the previous government’s forecast of a 3.1% increase in GDP.
($1 = €0.9961)
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