Greece Warns Against “Euro-Tax” on Cigarettes: Pierrakakis Cites Risk of Smuggling

Europe is preparing to introduce a significant increase in tobacco taxation that could see the price of a cigarette pack rise to €7, sparking concerns from Greece and other Southern European countries. The move, proposed by the European Commission and supported by Northern European nations such as France and the Netherlands, calls for a 139% rise in excise duties—from €90 to €215 per 1,000 cigarettes.

Impact on Consumers and Households

For Greek smokers, the proposed increase would have a profound effect. Currently, a pack of 20 cigarettes costs around €4.60, of which €3.74—or over 80%—is taxes. If the new directive is implemented, the price could exceed €7 per pack unless tobacco companies absorb part of the increase.

A smoker who consumes a pack daily would see their monthly expenses rise from roughly €140 to over €210, translating into an additional €800 or more per year—equivalent to an entire monthly pension for the average Greek retiree. Even occasional smokers would feel the strain, as each pack could cost as much as a daily coffee, significantly impacting disposable income.

Pierrakakis Raises Concerns at Ecofin

Greek Minister of Finance, Kyriakos Pierrakakis, addressed the issue at the Ecofin Council, stressing the risk of smuggling linked to abrupt tax hikes. “When we increase taxes excessively, smuggling also increases,” Pierrakakis said, urging policymakers to consider the practical consequences of such drastic measures.

He emphasized that while public health is a priority, any sharp increase must account for market realities and competitiveness:“According to our experience in Greece, and taking into account our geographic position, we have observed in the past that asymmetric tax hikes lead to a measurable rise in smuggling. At the same time, if prices for both traditional and innovative products rise too sharply, beyond what the market can bear, we must consider the impact on competitiveness—which affects investment and exports.”

Pierrakakis proposed a longer adjustment period for implementing the Tobacco Excise Directive, aiming to achieve public health goals without disrupting markets or incentivizing illicit trade.

Potential European Dispute

Greece’s position is likely to resonate with other Southern European countries such as Italy and Romania, which have voiced similar concerns. The European Commission document obtained earlier by Proto Thema revealed that beyond health considerations, the excise duties could be centralized as European revenues rather than remain national.

This centralization adds another layer to the debate, with countries opposing the measure potentially using veto power if a compromise is not reached. As discussions continue, the controversy highlights the tension between public health objectives and economic realities, particularly in nations sensitive to illicit trade and market disruption.

With cigarette prices potentially rising to unprecedented levels, the coming months will determine whether the EU can strike a balance that safeguards public health while maintaining economic stability across diverse European markets.

Source: pagenews.gr