Greek premier rules out snap election, says tax cuts will help families

By Angeliki Koutantou and Renee Maltezou

ATHENS (Reuters) -Greek Prime Minister Kyriakos Mitsotakis ruled out a snap election on Sunday and said that a string of tax cuts planned for 2026 were aimed at boosting a tumbling birth rate and stemming a protracted cost of living crisis.

Mitsotakis, who was re-elected in 2023 but whose centre-right party has been sliding in opinion polls, ruled out an election before his term ends in 2027, and said he was considering a third term.    

On Saturday, the Greek premier announced income tax breaks worth 1.6 billion euros ($1.87 billion) during an annual economic policy speech. 

"I wanted to send a message to families that we hear them," he said during a press briefing on Sunday.

 Analysts said the measures were also aimed at supporting middle-income earners, among them those who have traditionally voted for his New Democracy party.

New Democracy has seen a slide in popularity caused by high food, housing and energy prices and investigations into corruption allegations over recycling and EU subsidy fraud. 

Its ratings dropped to around 22-25% in polls since June, from the 41% it won in the 2023 election and 39.9% when it came to power in 2019. 

The graft and fraud investigations signal that state corruption which helped plunge Greece into a 2009-2018 debt crisis persists, despite reforms and tough austerity under three international bailouts.

The government's poor opinion poll performance has led it to shift to the right to win back core voters, analysts say. Greece has toughened its stance on migration and Mitsotakis said it would continue on that path.  

In July, Greece stopped processing applications of asylum-seekers from North Africa for three months, to curb a surge in arrivals. Mitsotakis said it had not been decided if the measure would be extended. 

Mitsotakis also commented on a planned subsea power cable linking Europe to Cyprus that has been hit by multiple delays and an investigation by European prosecutors,  

The 1.9 billion euro ($2 billion), EU-financed project would be completed, he said, calling on Cyprus to show a clear will for progress.     

($1 = 0.8542 euros)

(Reporting by Angeliki Koutantou and Renee Maltezou; Editing by Aidan Lewis)