More than a decade ago, Greece was Europe’s focal point for all the wrong reasons: following the Wall Street crash in 2008, Greece financially suffered the most out of all Eurozone countries, requiring an international debt bailout along with Ireland, Portugal and Cyprus. Greece received three rescue packages between 2010 and 2015 totaling €320 billion, however, it was the harsh austerity measures that came with debt relief that delivered a devastating blow to household incomes and pensions. The economy shrunk by 25%, hundreds of thousands of businesses failed, banks closed and by 2013, a whopping one third of Greeks were left unemployed.
In 2018, Greece managed to exit the strict fiscal controls of the bailout programs and the government’s confident steps have gained the Union’s trust. In 2021, Brussels policymakers approved another €30 billion for climate investments in Greece, as part of a broader initiative to strengthen EU economies post-Covid. And the comeback is still going strong: in the spring of 2022, just a few months shy of finally recovering the much desired investment grade rating, Greece repaid €2.645 billion to its partners, settling its obligations to the International Monetary Fund, by reimbursing an extra €1.86 billion that was due in early 2024. This year, the country is continuing early bailout loan repayments of up to €5 billion, sourcing the money from state cash reserves, which amount to approximately €35 billion, with future plans to enhance the sustainability of the debt during this favorable time period. Projections for the rest of 2024 are on Greece’s side as well, with a further reduction in general government debt to 152.3% of GDP, down from last year’s 160.3% – €355 billion in absolute terms.
According to recent data, the Greek economy grew by 0.7% in the first quarter of 2024 and monthly numbers seem to support a slow yet steady growth rate, surprisingly exceeding that of the Eurozone – public debt is on an upward trajectory in France, Italy, Slovakia and Finland, stabilizing at higher levels before the pandemic. Inflation also fell to 2.4% in May and long-term unemployment rate decreased by 0.6% points to 5.5%.
The shift is also evident in investor behavior, with big players eagerly participating: Microsoft is developing a €1 billion data center east of Athens. Further north, Pfizer is establishing a €650 million research hub. Companies from the U.S., China, and Europe are proposing renewable energy projects. Investments from Cisco, JPMorgan, Meta, and other multinational corporations are expected to generate an economic impact worth billions of euros in the coming years.
Recent geopolitical stability marks another important win for Greece – since last December, Greece and neighboring Turkey, having long been at odds over territorial claims in the Aegean and drilling rights in the Mediterranean, finally set aside their disputes and started fostering a relationship of mutual agreement. Following landmark talks in Athens, the two nations maintain regular and high-level contacts and are focusing on a positive agenda including trade, energy, education and cultural relations, as well as making reconciliatory moves, such as facilitating Turkish citizens’ visits to ten Greek islands without cumbersome visa procedures.
Impressive momentum has also been building in the Greek tourism industry, as well; last summer, over 10 million tourists visited Greece, generating estimated revenues exceeding €21 billion. Construction has increased both on the mainland and on popular Greek islands, driven by the high demand for hotels, Airbnb rentals, and the Golden Visa scheme, granting a residence permit through a minimum €250,000 investment in Greek real estate. Thanks to extensive development in the hospitality sector, Athens is now contributing just as much as iconic island destinations to overall growth dynamics in tourism, with revenues rising by 30% on the capital’s coastal front. According to a European Travel Commission report, Greece is expected to reach new record tourism revenues this year, remaining largely unaffected by high temperatures and summer wildfires brought on by climate change.
A decade ago, Greece’s overwhelming debt nearly caused the Eurozone to collapse. Today, Greece has transformed into one of Europe’s most stable and fastest-growing economies, making for one of the most impressive comebacks of modern times.
