Greece will spend an additional 3.5 billion euros ($3.9 billion) next year on pension and wage hikes and on defence, Finance Minister Kostis Hatzidakis said on Monday.
Hatzidakis was giving further details on a financial package that Greek Prime Minister Kyriakos Mitsotakis unveiled over the weekend that also includes a cut in social security contributions and an increase in the minimum wage
“We can do this because we have very strong growth, higher than the euro zone’s average (rate), Hatzidakis told a news conference
In his annual economic policy speech at the Thessaloniki trade fair in northern Greece, Mitsotakis said Greece wouldincrease pensions by up to 2.5% in 2025 and wouldraise the monthly minimum wage in an effort to relieve households struggling with an ongoing cost of Living crisis.
Greece is still recuperating from a debt crisis that wiped out nearly a fourth of its economic output in 2009-2018 amid austerity measures that included repeated wage and pension cuts.
But its public finances have been steadily improving in recent years, providing some scope for wage hikes within budget limits. The Greek economy is expected to grow by2.5% this year and by a similar rate in 2025, outpacing the eurozone average.
Earlier on Monday, two government sources told Reuters that Greeceplans to continue its repayments of bailout loans ahead of schedule, benefiting from its economic recovery and
primary budget surpluses. Source: Reuters (Reporting by Lefteris Papadimas, Writing by Angeliki Koutantou, Editing by Edward McAllister and Gareth Jones)
