“Greek Finance Minister Kostis Hatzidakis is in a situation that most of his colleagues in the eurozone are likely to be jealous of him”
Athens surpasses fiscal targets and becomes an EU model student, a German Handelsblatt report says on its course Greek economy.
Specifically, according to information from the Ministry of National Economy and Finance, the report states:
‘The Minister of Finance of Greece Kostis Hatzidakis It is in a situation that most of his colleagues in the eurozone are likely to be jealous of him. Audit “tanks” have been “filled” by overcoming forecasts. In 2024 they entered the funds of 68.8 billion euros, nearly two billion more than it was estimated in the budget.
And as Mr Hatzidakis also spent less than the foreseen, the end result is a surplus in the budget of 369 million euros. The Treasury was expecting a deficit of 3.6 billion. Even more striking is that the surplus in the primary budget balance, which does not include debt service, was € 8.7 billion, almost twice as high as previously estimated.
This is a stunning shift by a “offender” of fiscal tracks to a “student-model”. It is recalled that in 2009, Greece had a fiscal deficit of 15.2% of GDP. This was an unprecedented record of deficit in the euro area and the preamble to the Greek public debt crisis.
Even more surprising is the fiscal consolidation of recent years. Thanks to strong economic growth, austere budget training and timely repayment, Greece has reduced its public debt index faster than any other eurozone country by 2020: by more than 55 percentage points, from 209.4 to 154% of GDP.
Finance Minister Mr. Hatzidakis repaid € 7.93 billion at the beginning of December. This year, it plans to repay another 5.3 billion euros, which, according to planning, are not required before 2031 to 2042.
Fighting tax evasion
Greece had already exceeded its budgetary targets for 2023. The deficit amounted to 3.76 billion euros. The finance minister had predicted a deficit of € 8.34 billion. Revenue was € 1.8 billion above the designs, while costs were € 2.77 billion below forecasts.
The Minister of Finance owes the additional revenue of the last two years mainly to the successes in the fight against tax evasion. The digitization of the tax administration yields fruit.
Tax authorities also motivate consumers not to use cash. Anyone who pays by card automatically takes part in a tax lottery. There is a lottery for each card transaction. Each month there are a prize of 50,000 euros, five awards of 20,000 euros and 550 awards of 5,000 and 1,000 euros.
Finance Minister Kostis Hatzidakis sees the fight against tax evasion as a “socio -political bet” and promises that “we will return to society as any additional revenue allows for the EU’s budgetary rules”. The government of Prime Minister Kyriakos Mitsotakis has already reduced horizontally taxes and social security contributions from the 2019 duties. For example, it reduced the corporate tax rate from 24 to 22% in 2021. Real estate tax has also declined.
The government now wants to reduce taxes by 10,000 to 40,000 euros a year, especially for low and medium income. This will affect about 3.5 million taxpayers. Their incomes are taxed today with 22 to 36%. A further reduction in social security contributions is also discussed.
However, the finance minister wants to take his time with his tax plans. The Treasury says he wants to wait to see how viable the additional revenue is in the coming months.
The decision on tax cuts is to be taken in September. The prime minister will then give his annual central speech on economic and financial policy at the inauguration of the TIF. Many show that Mitsotakis will not disappoint the taxpayers. In addition, elections will be held in Greece in 2027. “
