Greece To Take Action Against Cruise Ship Tourism And Short-Term Leasing

By Eleni Chrepa and Sotiris Nikas

Sep 7, 2024 (Bloomberg) –Greek Prime Minister Kyriakos Mitsotakis introduced measures aimed toward addressing the unfavorable impression of overtourism as guests proceed to reach in file numbers within the post-pandemic period.

The federal government has been “very involved” about an inflow of cruise passengers throughout sure months of the yr and can start charging charges, Mitsotakis stated Saturday throughout his annual speech on the Thessaloniki Worldwide Truthful. It can additionally enhance a tax associated to the climate-crisis on lodging.

Greece obtained a file 36.1 million guests in 2023, whereas arrivals rose 16% to 11.6 million within the first half of 2024, in response to the newest knowledge from the Financial institution of Greece. The tourism sector contributes about 20% to the financial system, making it very important to the well being of the nation.

The nation can even develop its so-called “Golden Visa” program to buyers who’re prepared to place not less than €250,000 ($277,000) into native startups. Foreigners have been beforehand required to purchase property to accumulate the visa.

All passengers arriving at Greek ports can pay a payment, and the cost can be higher within the in style tourism islands of Santorini and Mykonos. A lodging tax for the April-to-October interval additionally can be elevated, with income benefiting native communities.

Mitsotakis reiterated concern that components of Greece face the issue of “overtourism.” In an interview with Bloomberg in June, he introduced plans to prohibit cruise ships visiting the nation’s hottest islands from 2025.

Quick-term leases have been blamed for fueling the nation’s housing disaster, which together with excessive shopper costs has been on the middle of latest political debate.

The federal government will ban any new short-term leasing for not less than one yr in three principal components of Athens, Mitsotakis stated. Property house owners who change leases from short-term to long-term gained’t should pay rental tax for 3 years, as will house owners who resolve to lease their houses as an alternative of conserving them off the market, he stated.

Vacation leases elevated an annual common of 28% from 2019 to 2023, whereas accessible short-term leases doubled in the identical interval. In the meantime, lodge lodging rose simply 3.5% in that interval, in response to knowledge printed in a Grant Thornton report for the nation’s Chamber of Inns launched this week.

The federal government can even start a brand new €2 billion program that can be used to cut back interest-rate prices for mortgage loans.

Extra Measures

Mitsotakis on Saturday additionally revealed a lot of measures aimed toward easing the price of dwelling, together with a discount in social insurance coverage contributions by 1 share level in 2025 as an alternative of a earlier plan for a 0.5 level minimize.

The premier additionally introduced, amongst others:

A 2.2%-to-2.5% enhance in round 2 million pensions from Jan. 1.
A rise in minimal wages starting in April
A rise in public sector wages, particularly to docs, firefighters and employees within the military and coverage forces.
Numerous tax reliefs to assist the self-employed, farmers and others
Modifications to unemployment advantages

“I don’t have a sack of reckless spending right now,” he stated. “Our spending for 2025 is properly balanced.”

Greece has already pledged to satisfy a funds major surplus — an index that exhibits income minus spending excluding curiosity funds — of two.1% of GDP for each 2024 and 2025, up from 1.9% in 2023.

Fiscal self-discipline is without doubt one of the most necessary standards for monetary markets, and the nation’s latest prudent funds path was one of many drivers for rankings firms to return Greece to the funding grade zone in 2023 after 13 years at junk standing.

“Wholesome and rising major surpluses, in tandem with sound nominal development, will facilitate additional vital discount within the public debt-to-GDP, which is anticipated to fall to beneath 140% by 2027, from 161.9% in 2023,” DBRS Morningstar stated Friday.