Athens: Greece has announced a 1.6 billion relief package to tackle a sharp decline in population that threatens to make it Europe’s oldest nation. Prime Minister Kyriakos Mitsotakis has described the measures as the boldest tax reform in more than five decades.
The package, set to take effect in 2026, introduces broad tax breaks and direct financial incentives aimed at supporting families to help counter Greece’s declining population. It includes a two-point reduction across all tax brackets, while low-income households with four children will pay no income tax. Residents of rural communities with fewer than 1,500 people will also be exempted from certain tax obligations, and real estate tax in remote areas will be scrapped.
Mitsotakis said that the state must support citizens choosing to raise families, noting that the cost of living is far higher for households with multiple children. Greece’s fertility rate currently stands at 1.4 children per woman, well below the replacement level of 2.1, which the government has labelled a ‘national threat.’
According to Eurostat projections, Greece’s population could fall from 10.2 million today to fewer than 8 million by 2050, with 36 percent of citizens expected to be over the age of 65. Finance Minister Kyriakos Pierrakakis added that fertility rates have halved since the economic crisis that began 15 years ago, when austerity measures forced over 500,000 young Greeks to leave the country.
Officials warn that reversing demographic decline is essential to protecting pension and health systems, labour markets, and national security. The new plan will be funded from Greece’s fiscal surplus, achieved through recovery after years of recession and international bailouts.
The government has previously introduced incentives such as a baby bonus in 2019. However, soaring living costs and low wages have limited the impact, with the education ministry confirming the closure of more than 700 schools this year as the declining population has led to a lack of pupils.
Housing affordability also remains a concern. Many young Greeks are unable to leave their parental homes until their 30s. To address this, the government has pledged to construct residential units on unused military land and increase pensions for struggling families.
Experts caution that unless the population trend is reversed, Greece faces long-term risks. A recent study by The Lancet warned that demographic change of this scale poses a direct threat to public health, the economy, and national stability, with lessons for other countries facing similar challenges.
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