ATHENS — Greece is preparing a major economic support package worth about €3.5 billion ($4.06 billion) after Prime Minister Kyriakos Mitsotakis announced tax reductions and wage-related measures while ruling out an early national election.

The package comes as the government attempts to strengthen household finances and rebuild political support ahead of the next parliamentary election, which Mitsotakis says will take place in spring 2027.

Tax Cuts Aim to Support Households

The measures include a range of tax reductions designed to ease pressure on households and businesses.

Farmers and families with three children are among the groups expected to benefit from tax relief, while self-employed workers and companies are set to receive changes affecting advance tax payments.

The government is also planning additional support for pensioners and public-sector employees as part of the broader economic package.

Government Focuses on Wages and Living Costs

Wage improvements form another important part of the government’s strategy.

The measures are intended to improve disposable income at a time when European households continue to face elevated costs for energy, housing and everyday goods.

Athens is seeking to translate stronger economic growth into higher household incomes while maintaining control over public finances.

Mitsotakis Rules Out Snap Election

Mitsotakis has rejected speculation that Greece could hold an early election.

Instead, he confirmed that voters will be called to the polls in spring 2027, keeping the government on its existing electoral timetable.

The decision provides the administration with additional time to implement its economic programme and demonstrate results before the next nationwide vote.

Political Support Has Weakened

The announcement comes against a difficult political backdrop.

Mitsotakis’ New Democracy party won the 2023 election with about 40.5% of the vote, but more recent opinion polling has placed its support below 30%, according to Reuters.

The government has also faced criticism over corruption-related allegations and other political controversies.

The new economic package is therefore likely to be judged not only on its economic impact but also on whether it can improve public confidence in the government.

Greece’s Economy Shows Stronger Growth

Despite political challenges, Greece’s economy has performed better than during the country’s debt crisis years.

Economic growth is running at around 2% annually, ahead of the wider eurozone average, while the government expects a primary budget surplus of about 4% of GDP in 2026.

That fiscal position gives Athens greater room to introduce tax relief and targeted income support without immediately returning to the severe budget constraints associated with the previous decade.

Debt Reduction Remains a Long-Term Goal

Greece is still carrying one of Europe’s highest public-debt burdens.

Mitsotakis has pledged to bring public debt below 110% of GDP by 2030, indicating that the government intends to combine short-term tax relief with continued debt reduction.

Achieving both objectives will require sustained economic growth and careful control of government expenditure.

Election Strategy Takes Shape

The economic programme is also likely to become an important part of the ruling party’s campaign strategy.

By reducing taxes and increasing selected benefits, the government can present itself as using Greece’s improved fiscal position to return part of the gains from economic growth to households.

The opposition, meanwhile, is likely to focus on whether the measures are sufficient to address the cost of living and whether the benefits are distributed fairly.

Greece Enters a Crucial Political Period

With the next election scheduled for spring 2027, Mitsotakis has several months to demonstrate whether his economic policies can translate into stronger public support.

The €3.5 billion package represents one of the government’s largest attempts to combine fiscal relief with income support while maintaining its longer-term debt-reduction objectives.

For Greece, the coming period will test whether continued economic expansion can deliver tangible improvements for households and whether those gains are enough to restore the government’s political momentum.