Athens, December 15, 2024 – The Greek Parliament has officially approved the state budget for 2025, echoing cautious optimism with projected GDP growth of 2.3%. This forecast outstrips the previous year’s estimate of 2.2%, indicating signs of economic recovery following the nation’s protracted debt crisis, which lasted nearly a decade, from 2009 to 2018. The budget garnered approval with a narrow margin of 159 votes in favor and 139 against, from a total of 298 parliamentary members.
Prime Minister Kyriakos Mitsotakis addressed the assembly prior to the vote, emphasizing the theme of “realism” central to the budget’s formulation. He reinforced the government’s commitment to fiscal discipline and vowed to protect the economic strides made so far. Mitsotakis characterized the 2025 budget as one of progress, stating, "This budget is viewed as the 'budget of progress,' reflecting the government's commitment to growth and support."
Among the significant initiatives outlined is a set of banking reforms aimed at alleviating some of the financial burdens on households—especially relevant after many Greeks voiced concerns over high banking fees. These include the removal of all commission fees for public utility bill payments and small interbank transfers. The Prime Minister declared the aim of these reforms to be greater competition among banks and improved interest rates for both deposits and loans.
Further, Mitsotakis announced plans to cap money transfer fees at €0.50 for transactions up to €5,000, which will surely benefit many citizens as they navigate their financial responsibilities. The Prime Minister insisted, "The government must return some benefits of growth to society," underlining the wider social responsibility associated with economic performance.
The 2025 budget also aims to achieve a primary surplus of 2.4% of GDP, following on the heels of the anticipated surplus of 2.5% for 2024. A total of twelve tax cuts and salary increases were incorporated, emphasizing the government's emphasis on economic growth alongside social support.
While the ruling center-right New Democracy (ND) party supported the budget, opposition parties were vocally against it. Nikos Androulakis, leader of the main opposition PASOK party, criticized the government’s economic policies as favoring oligopolies. He argued, "New Democracy’s economic policy is the joy of oligopolies...Greek society lives with reduced expectations..." These sentiments were echoed by other opposition figures, who questioned the budget's long-term benefits for ordinary citizens.
Defense spending also saw substantial emphasis within the new budget. It is set to nearly double, marking up to 6.1 billion euros ($6.5 billion), motivated by increasing military expenditures amid regional security concerns, particularly from Turkey, Greece's historical rival. Minister of Defense Nikos Dendias highlighted the necessity of such investments, stating, "Is this spending too much? Whoever is positioning themselves on this needs to explain on what criteria they are considering. Is the country threatened?"
The budget debate extended over five days, marked by impassioned speeches from various political leaders. The parliamentary discussion culminated with Mitsotakis's final address. He highlighted Greece's economic performance, proudly noting, "We rank among the top three worldwide for economic performance, according to The Economist." This recognition points to Greece's substantial recovery efforts, giving hope to its citizens yearning for stability.
Though the ruling party managed to secure enough support for the budget to pass, the presence of deep political divisions remains evident. Other smaller opposition parties, including SYRIZA, and the Communist Party overwhelmingly voted against the budget, raising their voices against what they perceive as policies reinforcing economic inequality. Opposition leader Socrates Famellos accused the government of merely providing palliative measures to pensioners rather than addressing the root causes of economic strife.
While optimism pervades from the government's forecast and initiatives, many are left wondering about the sustainability of Greece's economic growth amid external pressures and internal politics. The passage of the 2025 budget marks not only the allocation of funds but also the direction of Greece’s economic policy for the upcoming year, raising pertinent questions about equality, progress, and long-term viability. With the challenges yet to be addressed, only time will tell how effective these measures will be for the average Greek citizen.
