Greek Prime Minister Kyriakos Mitsotakis has announced measures aimed at addressing the negative impact of overtourism as visitors continue to arrive in record numbers in the post-pandemic era.
The government is “very concerned” about the influx of cruise ship passengers during certain months of the year and will start imposing fees, Mitsotakis said Saturday during his annual speech at the Thessaloniki International Fair. It will also increase a climate-related tax on accommodation.
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. Data From the Bank of Greece. The tourism sector contributes about 20% of the economy, making it vital to the health of the nation.
The country also plans to expand its so-called “golden visa” program to include investors willing to invest at least 250,000 euros ($277,000) in local startups. Foreigners were previously required to buy real estate to obtain the visa.
All passengers arriving at Greek ports will pay a fee, with the highest fees on the popular tourist islands of Santorini and Mykonos. The accommodation tax will also be increased for the period from April to October, with the revenues going back to local communities.
Mitsotakis reiterated his concern that parts of Greece were facing a problem of “overtourism.” In an interview with Bloomberg in June, he announced plans to limit tourist numbers to 100,000 visitors. Cruise ship restrictions Visit the country’s most popular islands by 2025.
Short-term rentals have been blamed for fueling the country’s housing crisis, which, along with high consumer prices, has been the focus of recent political controversy.
Mitsotakis said the government would ban any new short-term rentals for at least one year in three key parts of Athens. He added that landlords who change from short-term to long-term leases will not have to pay rent tax for three years, as will landlords who decide to rent out their homes rather than take them off the market.
Vacation rentals rose at an annual rate of 28% from 2019 to 2023, while short-term rental availability doubled in the same period. Meanwhile, hotel accommodations rose by just 3.5% in that period, according to data published in Grant Thornton Report The country’s hotel room was released this week.
The government will also launch a new €2 billion programme that will be used to reduce interest rates on mortgage loans.
More measures
Mitsotakis on Saturday unveiled a number of measures aimed at easing the cost of living, including cutting social insurance contributions by one percentage point in 2025 instead of a previous plan to cut by 0.5 points.
The Prime Minister also announced, among other things:
- An increase of between 2.2% and 2.5% for about 2 million pensions, effective from January 1.
- Minimum wage increases from April
- Increase in public sector wages, especially for doctors, firefighters, military and security personnel.
- Various tax breaks to help the self-employed, farmers and others
- Changes to unemployment benefits
“I don’t have a bag of reckless spending today,” he said, adding, “Our spending for 2025 is well balanced.”
Greece has already pledged to achieve a primary budget surplus — an indicator showing revenue minus spending excluding interest payments — of 2.1% of GDP in both 2024 and 2025, up from 1.9% in 2023.
Fiscal discipline is one of the most important criteria for financial markets, and the country’s recent prudent budget path was one of the reasons that prompted ratings companies to return Greece to the list of countries most affected by the financial crisis. Investment grade area In 2023, after 13 years of unwanted status.
“Healthy and growing primary surpluses, coupled with sound nominal growth, should facilitate a further significant reduction in the public debt-to-GDP ratio, which is expected to fall below 140% by 2027, from 161.9% in 2023,” DBRS Morningstar said on Friday.
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