15 years after the debt crisis: Greece's government cuts taxes

Only 15 years ago, Greece was on the verge of bankruptcy and leaving the euro. Only with a bailout package from international lenders did the country survive the crisis – accompanied by massive social cuts that hit the population hard. The last austerity and reform program ended in 2018. But now the situation has improved, and all important economic indicators are pointing upwards. The national debt ratio has fallen, companies are investing more again, and unemployment is only eight percent. During the crisis, it was 28 percent among the general population and 60 percent among young people.

Now the government apparently wants to do something good for its citizens – and has announced tax relief totaling €1.7 billion. Greece currently has "one of the highest economic growth rates in Europe," said Prime Minister Kyriakos Mitsotakis at the weekend at Greece's most important economic fair in Thessaloniki. In his speech, Mitsotakis drew a detailed comparison with France. While Greece had to borrow at an interest rate of 9.18 percent in 2015, the interest rate on French government bonds at the time was just under 1.16 percent. Today, Greek ten-year bonds are at 3.33 percent – ​​below France's level of 3.44 percent.

The government intends to spend approximately €1.7 billion on the planned measures. Young people under 25 with incomes up to €20,000 will be completely exempt from income tax. Families with children will also, in many cases, pay no or very low income tax in the future. Renters, residents of small villages, and island regions will also benefit from lower tax rates and targeted investment incentives. "All measures are in line with European budget guidelines," said Mitsotakis, a member of the conservative party.

The Greek government aims to use the tax relief to counteract rising living costs, tight housing markets and the ongoing emigration of highly qualified young people.