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Greece offers cash benefits, tax breaks to reverse falling birthrate

The prime minister has called it a national threat and a 'ticking time bomb' for pensions

Published: Thu 12 Sep 2024, 7:11 PM

Updated: Thu 12 Sep 2024, 7:12 PM

  • By
  • Reuters

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Swings are seen outside the closed school in the village of Ormenio, in the remote crop-growing area bordering Turkey and Bulgaria, northeastern Greece, on March 29, 2024. — Reuters file

Swings are seen outside the closed school in the village of Ormenio, in the remote crop-growing area bordering Turkey and Bulgaria, northeastern Greece, on March 29, 2024. — Reuters file

Greece outlined measures to boost its lagging birthrate on Thursday, from vouchers and childcare benefits to tax breaks for new parents, although experts questioned the plan's effectiveness.

Greece has one of Europe's lowest fertility rates, a dire demographic state driven by a decade-long economic crisis, emigration and changed attitudes among the young. The prime minister has called it a national threat and a "ticking time bomb" for pensions.

It currently spends around one billion euros a year on pro-child measures. Yet it recorded its lowest ever number of births in 2022.

The measures outlined on Thursday by the family, interior, finance and health ministries include tax relief for new parents, daycare vouchers, a rise in the minimum wage from 2025, pension increases and social contribution reductions.

But demography experts and even government officials acknowledge the long road ahead.

"It is a given that the demographic problem ... cannot simply be solved by benefits and cash incentives," deputy finance minister Thanos Petralias told journalists on Thursday.

Petralias said fixing the problem also required improving the education and health systems, boosting incomes and better work-life balance conditions.

Tumbling birthrates are a problem for governments across Europe, where countries including France, Italy, Norway and Spain have spent billions of euros on pro-child measures, to little effect.

The measures are part of a broader plan aimed at reversing the downward trend of Greece's birthrate, which officials had told Reuters would be unveiled in May but has been pushed back to later this year.

The plan includes affordable housing for young people, financial incentives for assisted reproduction, and incorporating migrants into the workforce.

"They (these measures) will have no dramatic impact on births," said Byron Kotzamanis, a leading demography expect in Greece.

"There needs to be a different policy to tackle the problem at its core," he said, adding this included giving young people incentives to remain in Greece and attracting back those who left.



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