Greek Prime Minister Kyriakos Mitsotakis announced measures to curb the negative effects of overtourism as record numbers of visitors continue to arrive in the country even in the post-pandemic period.
The government is “very concerned” about the influx of cruise passengers in certain months of the year and will impose fees, Mitsotakis said on Saturday during his annual speech at the Thessaloniki International Fair. The government will also increase a tax on accommodation linked to the climate crisis.
Greece welcomed a record 36.1 million visitors in 2023, while arrivals rose 16% to 11.6 million in the first half of 2024, according to the latest Data from the Bank of Greece. The tourism sector contributes about 20% to the economy and is therefore crucial for the health of the country.
The country will also expand its so-called “Golden Visa” program to investors who want to invest at least 250,000 euros ($277,000) in local startups. Previously, foreigners had to purchase a property to obtain the visa.
All passengers arriving at Greek ports will have to pay a fee. The fee will be even higher on the popular tourist islands of Santorini and Mykonos. The overnight tax for the period April to October will also be increased, with the proceeds going to local communities.
Mitsotakis reiterated his concern that parts of Greece are facing the problem of “overtourism.” In an interview with Bloomberg in June, he announced plans to Restrict cruise ships From 2025, the country’s most popular islands will be visited.
Short-term rentals are blamed for the country’s housing crisis, which, along with high consumer prices, has been at the centre of recent political debate.
The government will ban all short-term rentals in three main districts of Athens for at least a year, Mitsotakis said. Property owners who change their leases from short-term to long-term would not have to pay rental tax for three years, as would owners who decide to rent out their homes rather than keep them off the market, he said.
Vacation rentals grew an average of 28% annually from 2019 to 2023, while available short-term rentals doubled over the same period. Hotel accommodations, on the other hand, grew only 3.5% during that period, according to data published in a Grant Thornton report for the country’s hotel chamber, which was published this week.
In addition, the government will launch a new €2 billion program to reduce interest costs on mortgage loans.
Further measures
Mitsotakis also announced a series of measures to reduce the cost of living on Saturday, including a one percentage point cut in social security contributions in 2025 instead of the previously planned 0.5 percentage point cut.
The Prime Minister also announced, among other things:
- From January 1, around 2 million pensions will be increased by 2.2 to 2.5 percent.
- An increase in the minimum wage from April
- An increase in salaries in the public sector, particularly for doctors, firefighters and army and police personnel.
- Various tax reliefs for self-employed persons, farmers and others
- Changes to unemployment benefits
“I don’t have a bag of reckless spending today,” he said. “Our spending for 2025 is well balanced.”
Greece has already pledged to achieve a primary budget surplus – an index that measures revenue less expenditure excluding interest payments – of 2.1 percent of GDP in 2024 and 2025. This surplus is expected to reach 1.9 percent in 2023.
Fiscal discipline is one of the most important criteria for financial markets, and the country’s recent prudent fiscal stance was one of the reasons why rating agencies placed Greece back in the top 10 in the world rankings. Investment grade zone in 2023 after 13 years at junk level.
“Healthy and rising primary surpluses, together with solid nominal growth, will enable a further significant reduction in the public debt-to-GDP ratio, which is expected to fall from 161.9 percent in 2023 to below 140 percent in 2027,” DBRS Morningstar said on Friday.
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