Greek Prime Minister Kyriakos Mitsotakis unveiled initiatives to combat the detrimental effects of overtourism as tourist numbers continue to surge in the post-pandemic period.
During his annual speech at the Thessaloniki International Fair, Mitsotakis announced the government’s apprehension regarding the influx of cruise passengers during specific months and disclosed plans to implement fees to address this issue. Additionally, the government will raise taxes related to climate change on accommodations.
In 2023, Greece welcomed a record 36.1 million visitors, with arrivals increasing by 16% to 11.6 million in the first half of 2024, as per the latest data from the Bank of Greece. Given that the tourism sector contributes around 20% to the economy, it holds significant importance for the nation’s well-being.
The country will also extend its “Golden Visa” program to investors willing to invest a minimum of €250,000 ($277,000) in local startups. Previously, foreigners had to purchase property to obtain the visa.
All passengers arriving at Greek ports will incur a fee, with higher charges in popular tourism islands like Santorini and Mykonos. Moreover, a lodging tax for the April-to-October period will be raised, with proceeds benefiting local communities.
Mitsotakis reiterated concerns about parts of Greece facing issues of “overtourism.” In an interview with Bloomberg in June, he announced intentions to control the number of cruise ships
Short-term rentals have been blamed for exacerbating the country’s housing crisis, a topic of recent political discourse alongside high consumer prices. The government plans to halt any new short-term leases for at least a year in three key areas of Athens. Property owners transitioning from short-term to long-term leases won’t have to pay rental tax for three years, similar to owners opting to rent their homes rather than keeping them off the market. From 2019 to 2023, holiday rentals increased annually by an average of 28%, with available short-term rentals doubling during the same period. In contrast, hotel accommodations saw a mere 3.5% increase, based on data from a Grant Thornton report
The government will launch a €2 billion program to reduce interest rate costs on mortgage loans. In his address, Mitsotakis unveiled several measures to alleviate the cost of living, including increasing around 2 million pensions between 2.2% and 2.5% from January 1. Other announcements by the premier included: “I don’t have any reckless spending plans today,” he emphasized. “Our budget for 2025 is well-balanced.” Greece has committed to achieving a budget primary surplus of 2.1% of GDP in 2024 and 2025, up from 1.9% in 2023. Fiscal responsibility is crucial for financial markets, and Greece’s prudent budget trajectory has been a key factor in ratings agencies elevating the country back to the investment grade category
“Rising primary surpluses, along with solid nominal growth, will enable substantial reductions in the public debt-to-GDP ratio, expected to drop below 140% by 2027 from 161.9% in 2023,” according to DBRS Morningstar on Friday.Additional Measures
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