Greece pledges tax cuts and pay rises as protests over living costs swell

Greece's conservative government has announced a package of tax cuts and salary increases worth over €2 billion ($2.3 billion), as thousands of protesters took to the streets in Thessaloniki to demand relief from soaring prices.

Prime Minister Kyriakos Mitsotakis, speaking at his annual economic address in the northern city, said the country had "overcome stagnation" and was ready to benefit from its efforts. "As the country stabilizes, there will be relief from heavy taxes, higher incomes and bold reforms," he told the audience.

The measures, set to roll out over the next year, include tax breaks for self-employed professionals, farmers, and village residents, along with higher pensions and public sector pay. The announcement comes ahead of a general election expected in April, where Mitsotakis is seeking a third term.

However, the event was met with widespread dissent. Police estimated that more than 25,000 people joined union-led protests in Thessaloniki, with farmers driving tractors into the city center. Over 3,000 officers were deployed, closing streets and metro stations near the venue.

Labor unions argue that the measures fall short. Yiannis Panagopoulos, head of Greece's largest union GSEE, said, "Wages are low and prices are soaring, so affordability is the most serious problem." Greece's workers currently have the lowest purchasing power in the European Union, despite the country posting a budget surplus and 2.1% economic growth last year.

The protests were overshadowed by a separate tragedy: a fighter jet crash at an air show near Athens earlier in the day killed two air force pilots.