The €500 million figure was the final result of negotiations between Athens and the European Commission, aimed at creating additional fiscal room for benefits to be announced at the Thessaloniki International Fair (TIF) in September, targeting implementation in 2026. This was achieved by excluding a portion of defense spending from the calculations used to assess whether Greece meets its annual budget surplus targets.
This adjustment is reflected in the tables published in the European Commission’s country report on Greece, as part of the European Semester, and confirmed by the Ministry of National Economy and Finance.
The agreement allows Greece and Poland to use 2024 as the reference year for calculating increases in military spending, instead of 2021, which applies to other EU countries. In 2021, Greece’s defense spending was exceptionally high due to tensions over migration flows at the Evros border with Turkey. Using that year as a baseline would have skewed comparisons and penalized Greece, so 2024 was chosen as an exception.
Finance Minister Kyriakos Pierrakakis highlighted the development, stating:
“Our country will be able to spend over €500 million more for 2026. It is particularly important that our partners agreed to use 2024 as a reference year specifically for Greece, thereby creating additional fiscal space.”
This half-billion euros will be added to the projected increase in government spending margins expected to materialize later this year. It will fund permanent relief measures and tax cuts to be announced by the Prime Minister before the 2026 draft budget is submitted in November.
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