Greek PM unveils plan to boost incomes ahead of elections

ATHENS, Sept 5 - Greek Prime Minister Kyriakos Mitsotakis announced income tax breaks and wage increases for workers, pensioners and the self-employed on Saturday as part of a tax reform worth billions of euros ahead of elections next year.

The measures, with a cost of €2.2 billion for 2027, equal to about one percent of GDP, include an annual bonus of €400 for pensioners and €500 for public servants, zero income tax for low income farmers and low income families with three children and a reduction of the advance tax payment for self-employed and small businesses.

His center-right government, which was re-elected with 40.5% of the vote in 2023 promising to increase incomes, remains ahead in opinion polls but has seen its support slip to below 30% amid a protracted cost-of-living crisis and claims of corruption.

After a financial crisis in 2009 that triggered fears Greece would crash out of the euro zone, the country is now one of the best-performing in Europe. Greece's economy is expanding at an annual rate of 2%, outpacing the euro zone average. It expects a primary surplus worth about 4% of gross domestic product this year, almost double its initial forecast, giving the necessary fiscal space to fund the new measures.

Mitsotakis also announced a new hike in the minimum salary to €950 on a monthly basis and to €1,000 in 2028 and also a reduction of 0.5% for pension contributions.

(Reporting by Lefteris Papadimas, Editing by Timothy Heritage and Toby Chopra)