PM unveils tax breaks amid cost of living crisis
Greek Prime Minister Kyriakos Mitsotakis on Saturday announced generous income tax breaks to boost households with children, part of a tax reform worth 1.6 billion euros ($1.87 billion). The tax reform includes lower taxation by two percentage points for all brackets and a zero tax rate for low-income families with four children and young workers amid tumbling birth rates and rising housing costs. Mitsotakis also announced increases in pensions, while a real estate tax for remote areas will be scrapped to encourage young people to leave big cities and move to the countryside. On Sunday, during a press conference he replied, among others, to questions about Turkey, corruption allegations, Gaza and the housing crisis.
https://www.ekathimerini.com/economy/1280150/pm-unveils-tax-breaks-amid-cost-of-living-crisis
https://www.amna.gr/en/article/930883/Greeces-strategic-planning-is-not-subject-to-Turkiyes-approval
Androulakis: There needs to be a new beginning in the country
“There needs to be a new beginning in the country, a turning point, and for me, the next national elections are an opportunity to put an end to the Mitsotakis government,” underlined main opposition PASOK-Movement for Change leader Nikos Androulakis regarding the political aim of his party in an interview with SKAI Radio 100.3 on Friday.
https://www.amna.gr/en/article/930463/Androulakis-There-needs-to-be-a-new-beginning-in-the-country
Tsipras outlines five-year national recovery plan at Economist Summit
Former Prime Minister Alexis Tsipras presented the core elements of a five-year national recovery plan focused on supporting younger generations at the Economist’s Fifth Thessaloniki Metropolitan Summit on Friday.
The future of the Great Sea Interconnector (GSI), a project intended to link the grids of Greece, Cyprus, and potentially Israel, will be determined by its economic sustainability and will not be affected by Turkish reactions, Foreign Minister George Gerapetritis said on Friday.
ATHEX: Traders keep eye on news from Paris
Keeping an eye firmly fixed on developments in France – the key date being this Monday when the French government faces a confidence vote – traders at the Greek stock market remained subdued on Friday, with sellers keeping the upper hand and reduced trading volume. However, the benchmark’s decline was not enough to offset all of the week’s gains.
https://www.ekathimerini.com/economy/1280058/athex-traders-keep-eye-on-news-from-paris
SUNDAY PAPERS
KATHIMERINI: Chevron, the power cable and the USA
TO VIMA: Last exit: Middle Class
REAL NEWS: Mitsotakis Erdogan meeting: the 5 “thorns” of the New York agenda
PROTO THEMA: Crete: Mafia and the abbot even sold “Zorbas” [the beach where the movie was filmed]
MONDAY PAPERS:
TA NEA: PM announcements at TIF: What he said and what he meant
EFIMERIDA TON SYNTAKTON: PM announcements at TIF: Breadcrumbs for many, lies for everyone
KONTRA NEWS: The PM forgot farmers and small and middle classes
DIMOKRATIA: The PM’s pledges are a drop in the ocean
NAFTEMPORIKI: Brave plan of handouts with scent of stability
DRIVING THE DAY: FRANCE’S REGIME CRISIS
MACRON’S FATEFUL DECISION BRINGS ANOTHER MOMENT OF CRISIS: If you haven’t been following French politics closely, here’s a four-word update on the situation: Slow-motion car crash.
Bye-bye Bayrou: By 8 p.m. today, if things go as expected, Prime Minister François Bayrou will most likely be out of a job, voted out by a hostile parliament over budget plans that include, lest we forget, doing away with two public holidays.
Another one bites the dust: The prime minister — a once-beloved centrist who has the relaxed air of a country mayor — will be going the way of three predecessors installed by Macron in the past 15 months, ushering in yet another scramble to form a government and keep France’s increasingly wobbly public finances on the rails.
Different day, same problems: Bayrou faces the same forces that undid his predecessors: far-right and far-left parties that won’t back government spending plans under any circumstances, and a very reluctant Socialist party. (Read this handy primer on how the action in parliament will go down, courtesy of POLITICO’s Paris team.)
France on the brink: Yet this time feels different. Markets are more jittery about France’s ability to get its debt and deficit under control. And Macron looks weaker than ever, hopelessly tied to his decision in June last year to dissolve parliament following his defeat in European elections — one that now looks like a fatal error.
Macron’s big blunder: “It will be another reminder to the French population but also to Europe that Macron’s decision to dissolve parliament was a big strategic mistake,” said Mujtaba Rahman, analyst at the Eurasia Group. “It’s a decision that continues to weigh on Macron today and will undoubtedly keep doing so through 2027” when France has its next presidential election.
Jupiter can’t fix this one: No matter the outcome of today’s vote, Macron will remain an embattled president hamstrung by parliament. “The crisis is fundamentally unresolvable,” added Rahman, pointing out that only a presidential election would truly reshuffle the cards.
Life goes on: That said, the worst-case scenarios of Macron being forced to resign and International Monetary Fund officials taking over the reins of French public finances appear to be overblown. As messy as things look, the challenge for Macron is to 1) find a new prime minister quickly, as my Paris colleagues report here; and 2) convince a sufficient number of Socialist MPs it’s worth their while to back the budget.
This is hardly impossible. Bayrou’s failure to win the support of moderate Socialists seems more the result of personal and political incompatibility with them (and possibly some personal career ambitions — read this on how Bayrou could make a presidential bid in 2027) than some fundamental blockage.
It’s a “you” thing: It was Bayrou after all who made the fateful decision to make his budget vote an existential question about the future of French public finances. This didn’t win him friends among the Socialists, whose spokesperson blasted him after talks this summer as “arrogant and stubborn.”
Any other takers? Another prime minister may well do better. And unlike in previous rounds of government forming, there are credible names already circulating, such as Armed Forces Minister Sébastien Lecornu (profiled by my Paris colleague Laura Kayali here). Other potential next PMs include Justice Minister Gérald Darmanin and Economy Minister Eric Lombard.
(Meager) hopes: “For lots of different reasons it could work with one of these contenders,” added Rahman. “They [the Socialists] do want to demonstrate their capacity to govern, and the new budget presents an opportunity to include items they have been demanding: a tax on the very wealthy, a repeal of some of Macron’s tax break.”
The bottom line: This isn’t likely to be the end of Macron’s slow-motion car crash, but rather one spectacular flip of the stuntman’s jalopy. France’s political system is likely to weather the bumps, rather than blow up. Even so, avoiding an IMF takeover doesn’t look like much of a victory.
FOLLOW THE VOTE: Proceedings in the National Assembly are expected to begin around 3 p.m. Our colleagues in Paris will bring you all the latest developments as Bayrou faces his moment of reckoning in our live blog here.
SOTEU SNEAK PREVIEW
VDL TO LAY OUT SECURITY, COMPETITIVENESS AGENDA: The other big set piece this week is European Commission President Ursula von der Leyen’s State of the European Union (SOTEU) speech, which takes place Wednesday in Strasbourg in front of what’s expected to be a hostile Parliament. Read this primer from my colleague Max Griera on the “Gladiator”-like ambiance awaiting the president.
Hostile environment: Party leaders are ready to pounce on the Commission chief following an EU-U.S. trade deal that’s already come in for harsh criticism from the Socialists and Democrats (S&D) camp and looks ripe for further attacks.
Tough customers: “This asymmetric deal was signed in catastrophic conditions for the EU’s image,” Renew Europe Chair Valerie Hayer said of the transatlantic trade deal in an interview with the French daily Les Echos on Sunday. “It’s impossible to be satisfied with 15 percent tariffs. Especially as we don’t even have the stability and predictability that were promised by those who made this deal.”
Time for action: Speaking to Max, Hayer said that she expected “clear leadership” from the head of the EU executive branch. “Europe cannot afford institutional stagnation or standstill.”
Defense focus: Von der Leyen will do her best to respond to such demands in the first SOTEU of her second term. She’ll present a broad vision based on security and competitiveness with a fleshed-out plan for a “European semester on defense” as a key feature, according to two diplomats apprised of von der Leyen’s remarks to ambassadors.
360 on security: The president will present the EU’s defense buildup, its ongoing support for Ukraine, its upcoming 19th package of sanctions against Russia (more on this shortly) and future EU membership for Kyiv as part of a coherent vision on the bloc’s key security challenges, according to the diplomats.
Soft spot: She will also do her best to tout progress on the competitiveness front. But with little more to show than a Commission plan to create a savings and investment union, the lack of further progress on implementing the Draghi Report — which will be a year old this week — is likely to get negative attention from her audience.
On this score, an EU diplomat hinted at a broader critique you might hear on Wednesday — that perhaps von der Leyen’s centralization of power at the European Commission has limited her ability to manage more than one major front at a time. In other words, in being so focused on defense and Ukraine, she’s neglected competitiveness.
Zing: “It’s all well and good to be the geopolitical commission beefing up Europe’s defense industry,” the diplomat said. “But what will be able to do on any of that if we are the economic laggard of the world?”
They went on: “If you look at the Draghi report, it’s basically across the whole breadth of EU policymaking. The only way of getting serious about implementing this is to make sure your commissioners are firing on all cylinders — and the only way to do that is to give them leeway to work on their issues.”
Bonus tracks: Von der Leyen will also tout action on migration, as well as name-checking artificial intelligence and tech investment, and the bloc’s long-term budget. But don’t expect any spanking new announcements: the Commission has already laid out its stall with the Migration and Asylum Pact and its communication on “return hubs.”
RUSSIA SANCTIONS
SANCTIONS PACKAGE EXPECTED THIS WEEK: Another hotly awaited item is the EU’s 19th sanctions package against Russia, and — surprise, surprise — comments by Donald Trump’s administration are factoring heavily into discussions on purchases of Russian oil and gas.
ICYMI: When asked if the United States is ready to raise pressure on Russia, Secretary of State Marco Rubio and Treasury Secretary Scott Bessent have both responded by turning the tables and urging the EU to block off all purchases of Russian oil and gas. But, far from an empty critique, this is “helpful,” per one EU diplomat, because the targets for this criticism are Hungary and Slovakia, both countries that maintain dependency on Russian energy exports.
Wait for it: The Commission has already kicked off its confessionals on the sanctions — consultation sessions with EU ambassadors. But a formal proposal for a 19th sanctions package is only likely to land toward the end of this week, two diplomats said.
Re-exporting targeted: The core of the new package is about addressing circumvention and evasion of sanctions, as well as tightening the net around energy and financial services. Given it’s the 19th package, diplomats don’t expect anything brand new, with one exception: a ban on third-country re-exports.
Closing loopholes: This aims to address the problem of countries that are allowed to import EU goods re-exporting them to Russia, bypassing the restrictions.
The hand of Washington: As always, opposition from Hungary and Slovakia is expected to stand in the way of passing the sanctions, which require unanimity. But here again, a deus ex machina — in the form of a call from Washington — could make the difference. “In previous rounds of sanctions packages there has been American pressure both under Biden and Trump on Hungary to finally come around,” said a diplomat.
MIGRATION
EX-GERMAN MINISTER CLAPS AT COMMISSION OVER BORDERS: Germany’s former state secretary for the economy, Sven Giegold, isn’t especially pleased with a response he got from the European Commission regarding the rejection of asylum-seekers at Germany’s borders.
Complaint: “Compliance with European law must be binding for all member states, including the largest and most influential ones,” Giegold wrote in a missive to the Berlaymont, referring to a Berlin court decision that found it is unlawful to turn away asylum-seekers under the EU’s Dublin procedure.
Tsk-tsk: But when Migration Commissioner Magnus Brunner wrote back, pointing to the implementation of the Migration Pact in 2026, Giegold let loose: “Ursula von der Leyen’s guardian of the Treaties is on an unexcused absence … A plan of measures for the implementation of new EU law in 2026 can never justify a violation of EU law in 2025. This is dishonorable for a community governed by the rule of law,” he fumed in a statement.
CONTROVERSY IN PARLIAMENT: The chairs of the S&D, liberal and Green groups have written to Parliament President Roberta Metsola asking her to cancel a debate on migration scheduled Wednesday by the far-right Patriots for Europe, unless it agrees to change the title, Max Griera writes in to report. The groups argue that the title (“After 10 years, time to end mass migration now — protect our women and children”) goes against the Parliament’s standards of non-discrimination and could encourage “hatred and violence,” the letter says.
IN OTHER NEWS
TRUMP TEASES GAZA DEAL: U.S. President Donald Trump told reporters late last night that a deal with Hamas for the release of the remaining Israeli hostages is close to being agreed, after he issued a “last warning” to the militant group. “You’ll be hearing about it pretty soon,” Trump said, without providing specifics. Reuters has more.
FAKE NEWS: German Chancellor Friedrich Merz has become a key focus of the Kremlin’s relentless online disinformation campaign because of his support for Ukraine, security experts and intelligence authorities told my colleagues Nette Nöstlinger and James Angelos. German authorities have few effective methods to counter the firehose of falsehoods.
Bonus read: Taking a page from the Chinese playbook, Moscow is pushing a messaging app that gives the government access to user data while isolating them from the rest of the internet, Eva Hartog reports.
GREENS HIT BACK AT VUČIĆ: The European Greens have urged Brussels to stand up for democracy in Serbia after its president, Aleksandar Vučić, attacked party figures as “scum” for taking part in an anti-government protest in Novi Sad on Friday. “The European Union cannot remain silent,” Vula Tsetsi, the Greens’ co-chair, said in a statement that accused Vučić’s government of using authoritarian tactics against peaceful demonstrators. The European Parliament will debate the use of force against protesters in Serbia on Tuesday.