The Real Estate Acquisition and Leaseback Agency is expected to be operational by the end of fall, according to statements made by Minister of National Economy and Finance Kyriakos Pierrakakis at the Economist and powergame.gr conference in Chania, where he presented the protection framework for vulnerable households and primary residences.
As he noted, the new agency will enable citizens who are unable to service their debts to remain in their homes by paying subsidized rent for up to 12 years, with the prospect of repurchasing the property.
At the same time, he emphasized the importance of the out-of-court mechanism, referring to the first comprehensive framework for protecting primary residences in the country.
In the interview, he also discussed the state of the economy, investments and exports, the government’s tax policy, as well as measures to address the energy crisis and support society.
Below is the full text of Kyriakos Pierrakakis’s remarks:
Mr. Minister, I will get straight to the point, starting with the most recent developments. What was the rationale behind the government’s decision to extend the subsidy for diesel fuel rather than gasoline? Or why not both—why not extend the subsidy for both, or continue it for both, or for neither? What was the rationale behind this choice...
Let me start by saying, Mr. Mandravelis, that the entire concept is a package of measures that comes at times when we need to intervene most effectively. And so far, we have supported society with over 800 million euros through the totality of measures we have designed and are implementing. In this context, we decided to extend the diesel measure for the following reason, with the 15-cent subsidy, which is 12 cents plus VAT.
Diesel relates to how the energy crisis more broadly affects inflation. That is, what we call the “pass-through”—how energy prices are passed on to inflation and the economy as a whole—we recognize is clearer and more evident through the rise in diesel prices. And in that sense, this is something we have chosen to do in contrast to the other measures, which are precisely targeted and tailored to specific social groups.
Here, we wanted to do something that affects the entire economy through supply chains and through the broader impact. Now, does this mean we won’t intervene further if we assess that the situation requires it? I’ll answer that. No. If necessary, we will intervene further. But at this moment, based on the data we have, based on where the price of Brent stands, we judged that this is the move we needed to announce at this time.
Beyond that, we have proven it, not just in relation to the energy crisis, but more broadly. When sufficient fiscal space is created, the entirety of that space flows back to the people, flows back to society. That is what we did in our recent announcements, and that is what we will continue to do in the coming period.
Minister, where do we stand regarding the protection of vulnerable households and the creation of the Real Estate Re-leasing Agency? Why is it taking so long? This process has been going on for two years now, and perhaps fifteen since the start of the crisis that necessitated such an Agency.
Let me start by saying, Mr. Mandravelis, that while I hear a great deal about foreclosures, less than 10% of them involve residential properties—and when we say residential properties, we don’t mean only primary residences. We mean secondary residences and vacation homes. I say this so that we have a real sense of the scope of the problem, without, of course, claiming that this is not a problem we must address, to which we must not respond.
So we are responding, and I believe we are responding in the most comprehensive way the Greek government has addressed this issue to date, through two key policies: The first concerns, as you mentioned, the Real Estate Acquisition and Leaseback Agency. It is, of course, a complex project to get this agency up and running, but in any case, we are now truly in the home stretch. We are expecting binding offers very soon. And if I had to put it in a headline, I believe the news is that this agency will be operational by the end of fall.
Why is this agency important? It is important because those who are truly vulnerable will be able to qualify for its assistance, and if they cannot meet the terms of their current arrangement, then the agency will acquire the property and, with a state-subsidized rent ranging from 70 to 210 euros, for up to 12 years, allowing them to pay rent and remain in their home, and at the end of the period be able to reclaim it. Thus creating a real safety net for the vulnerable…
I mentioned two policies, of course. On the one hand, we have the agency; on the other, we have the out-of-court mechanism. You can see how much we are investing in the out-of-court mechanism, and I would also point out how clearly it affects thousands of households in our country every month.
You have already seen that we have reduced the eligibility threshold from 10,000 to 5,000 euros. So, what intervention will we make there? The intervention is that citizens will be able to define the scope of protection themselves, to say that they want to protect only their primary residence and thus achieve a higher haircut and a lower monthly payment.
If one were to add these up, these two policies together constitute the first comprehensive framework for protecting primary residences in our country, free from the legal ambiguities and complexities of the Katseli Law. And to put it simply, at the political level, a citizen who wants to protect their primary residence by meeting their obligations will not be left unprotected. No citizen in this country.
Today, after seven years of New Democracy’s governance and five years of implementing the Recovery Fund, do you believe the country has transformed the structure of its domestic production and economy? Have we changed the production model, Minister?
I believe we are on that path. I believe the production model is changing day by day. Let me mention two key figures, along with all the rest. The first is investment relative to GDP. We were at 11% in 2019, the European average in 2021; right now we are at 17%.
In other words, we are on a path, on a course of change in the production model with regard to investment.
Take exports, for example. What was the production model that failed in 2008–2009? An inward-looking model based on consumption and imports rather than investment. I mentioned investment. Back then, exports accounted for 20% of GDP; now they stand at 42%. You might say, “The European Union, the European average, is 51%.” I would reply that we have not yet completed this transition, but we have covered a very large part of it—a very healthy part of it.
And if one adds to this the fact that our country now has a balanced budget, is generating surpluses, is reducing its debt faster than any other country in the world, is not passing the burden on to the next generation, and we are not at risk for 2032, as we used to hear—and of course, if he emphasizes that we have unemployment in the 8% range and will very soon reach a historic low in unemployment, then all of this together establishes that it is a given that the country’s productive model is changing.
Besides, as you know, Mr. Mandravelis, we’re hearing criticism from the Opposition regarding the Recovery Fund. And let me say that the Opposition is displaying its usual contradiction here. Because on the one hand they criticize us for the Recovery Fund, and on the other they ask us in Parliament, ‘What comes after the Recovery Fund?’ So, since they themselves say that the Recovery Fund reduced the gap in the economy, the contradiction in this criticism is fundamental. Because, in fact, the Recovery Fund—since it combined programs with reforms—plays a very important role in enabling us to implement the digital transition, the green transition, and a series of objectives across the full range of the economy’s productive sectors.
And of course, let me add here that Greece is also participating in a broader European discussion regarding cross-border mergers and acquisitions—such as how, for example, the Greek stock exchange became a member of the Euronext network, and how one of our systemic banks (Alpha Bank) became a member of the Unicredit network; we are entering a broader European discussion, but on terms of double the growth rate compared to the European average, on terms of convergence.
So, to summarize, our country’s production model is changing day by day; political and fiscal stability is required to continue on this path and achieve this change. It would never change in a day or a week. It takes systematic work to achieve it. But right now, we are on a path that is achieving this. I won’t claim that there are no difficulties. I won’t claim to the people watching us that there aren’t still enough problems we need to solve.
But now, if you will, there has been a shift in understanding: problems are not solved by a single law or a single article. They are solved through systematic work, through planning, through a strategy, through determination, and above all through the faith and conviction that it is entirely possible for our country to reach the place it deserves.
The opposition often accuses you of being a government that serves big business. I don’t want you to respond to that. But why should wages and real estate income be taxed at as high as 45%, while corporate dividends and profits are taxed at just 5%?
This, you know, is yet another contradictory criticism from the opposition, because the very same opposition that says these things is the one that overtaxed the middle class and the one that, as SYRIZA, began reducing the dividend tax you mentioned, bringing it down to 10% when we took office.
But let me start by saying that we are a government that implemented the largest reduction in direct taxes since the restoration of democracy, that it was a reduction in direct taxes targeting the middle class, targeting families with children, targeting young people entering the labor market, we are setting the tax rate to zero for young people up to 25 years old who are starting their journey in the labor market. We are a government that has increased the minimum wage by 46%.
The minimum wage was 650 euros and will reach 950 next year. This entire journey is the journey of a government and a country striving to support the whole of society. And I believe this is clearly demonstrated by the data.
And I’ll say it again: there are problems. But every step we take to strengthen the country as a whole affects everyone. Moving on, I’d like to focus a bit more on dividends.
You know, we took over in 2019 from SYRIZA with a 10% dividend tax. At that time, the total amount declared was 1.7 billion, and we collected 173 million in taxes. As soon as we lowered it to 5% on 1.7 billion, do you remember how much was declared? 5.7 billion, and we collected 288 million in revenue the following year. That was in 2020. In 2024, from 5.7 billion, we went up to 7.7 billion, and 386 million euros were declared.
In other words, all of this is part of an equation that, at the end of the day, generates more revenue for the state budget, and thus we are able to support more and more people in a better way. And more generally, what do we want to do as a government, what do we aim to do as a government? To remove burdens.
Aren’t there a lot of tax burdens in our country since the transition to democracy? We’ve cut 83 taxes and fees. And let me tell you something: taxes are still high relative to what we want to achieve. We want to achieve even greater reductions—for citizens, for the vulnerable, for businesses.
But I think people know full well that we have the credibility to tell them the truth. We will reduce taxes; we will support society more and more as our ability to do so grows, as the fiscal space to do so expands. Anything else is unrealistic and amounts to the same political rhetoric that has consistently failed over the past decades. It has passed the burden, if I may say so, onto my generation and all the younger generations trying to enter the job market. Now it is up to us, and we will not pass the bill on to future generations; we will continue to support society and the economy as a whole.
Greece can achieve truly spectacular results. It is already doing so. It is entirely feasible if we continue our hard and focused work systematically.
However, opinion polls in recent years show a significant credibility deficit on the part of both the opposition and the government, which appears unable to convince the electorate.
Since there is no rival to New Democracy, why is the government losing popularity, and if in the future there is a risk of losing the advantage of political stability that it currently enjoys—which is a major asset for both the economy and society.
It is absolutely essential that the country not lose the advantage of political and, by extension, economic stability, because it is the only real and practical way to support society.
I will go on to say that as far as the opposition parties are concerned, under no circumstances should any of us underestimate them or underestimate the opposition—the discussion is about proposals, not about individuals. There is a comparison. Prime Minister Mitsotakis is compared to Mr. Tsipras, to Mr. Androulakis, to all the political leaders.
Politics does not take place in a vacuum. It takes place under real-world conditions. And the public makes its judgment today in the polls, and tomorrow at the ballot box. It is the programs, solutions, and policies that will ultimately be compared.
I would say that, from a historical perspective, we are in the seventh year of governance. Naturally, in the seventh year of governance, there is a certain degree of wear and tear. But as far as we are concerned, I think people know that we are the only ones who can provide practical solutions to all the problems they face.