Greece has announced strong measures, including tax relief and other financial incentives, to address the decline of the population leading the country to the status of the oldest nation in Europe.
Prime Minister Kyriakos Mitsotakis stated that the 1.6 billion euro aid package has been dictated by one of the biggest challenges facing the Mediterranean country, a demographic voice of unprecedented proportions.
“We know that the cost of living is one thing when you have no children and quite another when you have two or three,” Mitsotakis said, after the announcement of policies.
“Therefore, as a state we have to find ways to reward citizens who choose to have children. Measures include 2 percentage drops for all tax categories and a zero rate for low -income families having four children. These measures will take effect in 2026.”
Mitsotakis described the package as the boldest tax reform implemented in Greece in more than 50 years.
The Greek population is expected to drop from 10.2 million currently to less than 8 million by 2050, when 36% of it will be over the age of 65, according to Eurostat.
Finance Minister Kyriakos Pierrakakis admitted that the decline has taken on existential proportions, stressing that fertility rates have been halved since the beginning of the economic crisis 15 years ago.
“Our tax reform will focus strongly on this problem … as the leader of the economic team, I would say that our main advantage is the demographic issue,” he said.
The nearly one -decades of Greece has been widely blamed for this alarming fall, especially due to the blow that young people suffered from the coercive measures required in exchange for international rescue funds.
More than 500,000 Greeks left the country in search of work during the crisis – an exodus of young people and talented professionals that the government is trying to overthrow.
Officials warn that the decline in fertility is endangering pension and health systems, labor market and national safety, at a time of geopolitical uncertainty.
Since 2020, the Mitsotakis government has introduced a baby bonus to encourage births. The subsidy has increased from 1,700 euros for the first child to 3,500 euros for the fourth, along with a monthly payment of up to 140 euros per child.
However, due to the high cost of living in a country with some of the lowest wages in the EU, policies appear to have had a limited effect.
The Ministry of Education announced this month the closure of over 700 schools across the country due to the lack of students.
Also, taxes on immovable property in remote areas will be abolished to encourage young people to move to the village, where prices are significantly lower than in cities.
The housing is so unbearable that many young Greek young people are forced to live with parents up to the 30’s-another reason mentioned for the lack of interest in having children.
