Greece's new course after the summer break

Political starting point

The context of the Thessaloniki International Fair 2025 illustrates a realignment of political forces in Greece. The ND government of Kyriakos Mitsotakis, in office for over six years, is trying to convey an image of stability and forward-looking policy in times of economic stress and demographic challenges. The measures presented in Thessaloniki are primarily aimed at the middle class and youth – voter groups that are particularly crucial for the political future. At the same time, the opposition is changing: the socialist PASOK has become the second strongest force, while SYRIZA is weakened by internal conflicts and splits. This creates a political landscape in upheaval, in which the government wants to consolidate its dominance and the opposition is looking for credible alternatives.

Demographic profile of Greece

The demographic profile of Greece shows a society in shrinking and ageing. The population in 2025 comprised around 10.4 million people, although the natural population development is negative: fewer children are born than people die. The total increase is only +0.13%. The fertility rate of 1.43 is well below the reproduction level of 2.1, albeit in line with the European average. At the same time, about 24% of the population is already older than 65 years. This demographic ageing places considerable strain on the pension and health care systems. In addition, there is the migration of young, well-educated workers abroad, which exacerbates the shortage of skilled workers. The development is also visible in the education sector:  For three decades, more than 750 schools have been closed due to declining student numbers, with another 15 closures at the beginning of the 2025/2026 school year. The combination of low birth rates, an ageing population and brain drain poses a structural challenge for Greece, which in the long term endangers economic dynamism as well as social cohesion and the country's future viability.

Three political objectives

The demographic problem was at the heart of the Prime Minister's announcements at the Thessaloniki International Fair and was presented as one of the greatest national challenges with long-term social and political implications. Kyriakos Mitsotakis presented a package of measures that, on the one hand, are intended to keep young people in Greece and open up better prospects for them, and on the other hand, to provide targeted support for families with children in order to counteract the low birth rate and the brain drain. Specifically, the program includes a complete tax exemption for young adults up to 25 years of age with an income of up to 20,000 euros p.a., as well as significant tax benefits for families, which are staggered according to the number of children. For families with many children, the tax burden can even be eliminated completely. In addition, a new housing programme has been announced: 2,000 apartments are to be built on former military sites, 75% of which will be allocated to families without their own house, while 25% will be reserved for members of the armed forces. The regions also benefit, for example through the complete abolition or halving of property tax (ENFIA) in villages and the reduction of VAT on small islands. Strategically, these measures pursue a dual purpose: on the one hand, they are intended to improve the income and living conditions of households, and on the other hand, they are intended to shape the image of a government that "thinks about the future" and actively works to secure population development. The demographic issue is thus not only treated as a social problem, but also as a central political narrative that links the economy, social cohesion and national strategy.

Economic Policy and the Middle Class

Economic policy with a focus on the middle class formed the second central part of the Prime Minister's announcements. The aim of the measures is to strengthen purchasing power and relieve households in the face of persistent price increases. Mitsotakis announced a reduction in income tax rates of two percentage points for most income groups, supplemented by additional deductions based on the respective family situation. This is intended to support the middle class – the social group that historically represents the ruling party's most important voter base, but at the same time has been particularly heavily burdened in recent years by the pandemic, energy crisis and inflation. Special attention is also being paid to younger workers: for the age group of 26 to 30-year-olds, the tax rate is to be only 9% in the future (instead of 22% previously). This not only serves to relieve financial relief, but is also intended to create a new positive bond between the young generation and the political system. Politically, the government is pursuing the goal of responding to social fatigue caused by price increases and growing inequalities and presenting itself as a force for "stability with social responsibility". The tax reforms thus have a dual function: on the one hand, they act as an economic instrument to strengthen purchasing power, and on the other hand, as a political signal that the government takes the everyday life of the middle class seriously. In the logic of the election campaign, this is intended to secure the trust of those voters who traditionally decide on election results.

Reforms and the European dimension

Reforms and the European dimension were the third core topic of Prime Minister Mitsotakis' announcements at the Thessaloniki International Fair. This was not about short-term measures, but about a modernization plan with a time horizon up to 2030. Four key projects were identified: the introduction of a national secondary school leaving certificate, the completion of a new national health system, the completion of spatial planning and the land registry, and the development of a new energy map with the aim of greater autonomy and affordable energy prices. These initiatives should not be understood as isolated interventions, but as part of a broad reform agenda aimed at structurally renewing Greece and overcoming old weaknesses in the public sector. Politically, the government is thus pursuing the goal of leaving behind the image of an inefficient state and building trust both in society and among international partners. The message is that Greece is a country of stability, predictability and willingness to reform. At the European level, the announcements also have a clear signal effect. Athens wants to show that it is a reliable partner, able to use EU funds effectively, collaborate on energy and climate projects and attract investment. Thus, the reforms serve not only as domestic political legitimacy, but also as a diplomatic instrument that strengthens Greece's position within the European Union and at the same time opens up new opportunities for cooperation – especially with Berlin and Brussels.

Result

The Prime Minister's announcements at the Thessaloniki International Fair 2025 outline an ambitious strategy that combines short-term relief with a long-term reform agenda. The focus on the demographic problem and the middle class shows that the government has recognized the social and economic fault lines that threaten social cohesion. At the same time, reforms in the health sector, education and the energy sector are intended to convey the image of a more stable and reliable Greece at the European level. However, open questions remain about implementation: whether tax breaks and new programs are financially sustainable, and whether they will actually be able to reverse deep-rooted trends such as low birth rates or emigration, is uncertain. Overall, the government conveys optimism and a focus on the future, but success will be measured by whether the announcements can be translated into concrete and effective results. There are still a good 1.5 years left until the next election – enough time to regain confidence for a 3rd term for Mitsotakis.