KKE: 'Government refers to September calendars for discussion of any price cuts'

Prime Minister Kyriakos Mitsotakis recently addressed supporters of his ruling New Democracy party in the Athens district of Egaleo, defending his government's performance since the start of its second term in 2023. During the speech, Mitsotakis emphasized the government's commitment to making Greece a safer and stronger country, highlighting that the promises made by the administration have been fulfilled. He acknowledged the ongoing challenges faced by citizens, particularly concerning the cost of living, but asserted that the most effective response to rising prices is increasing wages.

Mitsotakis also spoke about a recent agreement reached between the government and manufacturers and retailers. According to the deal, these entities have committed not to raise shelf prices for the next two months in exchange for the government not extending a profit cap on several essential consumer goods when it expires. This cap was initially implemented in response to the war in the Persian Gulf. Additionally, the prime minister mentioned that supervisory mechanisms are in place to monitor and potentially reduce fuel prices.

In his address, Mitsotakis turned his attention to the political opposition, criticizing those who attempt to revive old promises and outdated slogans. He specifically referenced former Prime Minister Alexis Tsipras, who previously led the left-wing SYRIZA party during a period marked by Greece's third international bailout program and concerns surrounding potential exit from the Eurozone (Grexit). Tsipras has recently re-entered frontline politics with the formation of the Greek Left Alliance (ELAS) party, which currently holds the second-highest popularity rating according to opinion polls, following New Democracy. The next general election in Greece is scheduled for 2027.

The Communist Party of Greece (KKE) expressed skepticism regarding the government's approach to addressing the rising cost of living. In a statement, the KKE criticized the government for deferring discussions about potential price reductions until September, arguing that such delays exacerbate the financial strain on citizens. They pointed out that the government continues to impose indirect taxes and maintain stagnant wages, despite promoting tourism-related economic growth that drives up prices for certain goods. Furthermore, the KKE highlighted the impact of EU policies favoring capital interests, including energy initiatives involving American liquefied natural gas (LNG), which contribute to increased energy costs.

The KKE also noted the lack of genuine relief measures for the populace, emphasizing that their proposed solutions—such as abolishing value-added tax (VAT) on everyday items and special taxes on fuels, along with wage increases—are more effective than current government efforts. They criticized the opposition parties for failing to take responsibility for issues related to VAT and wages, as well as their support for EU policies that prioritize capital gains over workers' welfare.

As the upcoming elections draw nearer, political sensitivities around economic policies become increasingly pronounced. One notable example is the Katseli Law, which deals with interest calculations for highly indebted households. A court decision in 2024 influenced the government's stance on this issue, prompting legislative action that benefited approximately 100,000 borrowers under loan forbearance programs. Another sensitive topic involves the discussion held at the PM’s office regarding potential measures to reduce or freeze prices for food and other consumer goods during the summer season. Although delayed, such actions could provide temporary relief to households facing financial difficulties, especially those struggling with monthly expenses.

Despite the urgency of the situation, Greece faces significant challenges in curbing inflation, which ranks among the highest in both the eurozone and OECD member states. Unlike other European nations that have reduced indirect tax rates to alleviate pressure on consumers, Greece has not implemented similar measures, opting instead to generate surplus funds necessary for announcements planned at the Thessaloniki International Fair in September. From 2020 to 2025, while nominal wage growth amounted to 16.7% and labor productivity rose by 7.8%, the overall index increased by 20.9 points rather than the anticipated 8.9 points—a discrepancy attributed primarily to increased corporate profits.

To effectively tackle these issues, policymakers must focus on bolstering the productive foundation of the economy, implementing controls throughout the consumer goods supply chain, addressing the housing crisis by enhancing market supply, reinforcing healthy competition against monopolistic practices, and ensuring fiscal consolidation to prevent excessive burdens on citizens. However, current strategies appear to move in the opposite direction, intensifying perceptions of systemic failure beyond mere governmental responsibility.