Greece, once teetering on the brink of financial collapse and nearly breaking the eurozone a decade ago, has made an astounding comeback, transforming itself into one of Europe’s fastest-growing economies. In a striking testament to this revival, credit ratings agencies have upgraded Greece’s debt, attracting large foreign investors and marking a remarkable turnaround from years of austerity measures imposed during international bailouts.
During the financial crisis, many small businesses throughout Greece faced the brink of collapse as construction projects ground to a halt due to austerity measures. Today, businesses are thriving, with high-rises and new buildings dominating the city’s skyline. An economic recovery has not only breathed life into this sector, but has also created a labour shortage due to overwhelming demand.
Greece’s economic renaissance is evident in various aspects. Its economy is now growing at twice the eurozone average, and though unemployment remains at 11 per cent, it’s the lowest it’s been in over a decade. Tourism has made a resounding comeback, fuelling a construction frenzy, while multinational corporations like Microsoft and Pfizer invest in the country. Banks, once on the brink of collapse, are now lending again, benefiting the broader economy.
Yet, Greece faces several challenges as it navigates its path to prosperity. Its mountainous debt, although reduced, still stands at 166 per cent of the economy, one of the world’s highest. The country’s banks continue to grapple with a significant volume of non-performing loans, exceeding the European average. High inflation, fuelled in part by Russia’s war in Ukraine, adds to the lingering effects of austerity for some Greeks.
The credit rating upgrades by agencies like DBRS Morningstar and Moody’s highlight Greece’s newfound credibility, opening doors for foreign investors to buy government bonds and reducing borrowing costs for households and businesses. Investments from global giants like Microsoft and Pfizer further underscore the country’s attractiveness to international corporations.
Tourism, a major driver of Greece’s economic resurgence, brought in over €21 billion in estimated revenues this summer, with construction flourishing both on the mainland and popular Greek islands. A program allowing foreigners to obtain visas to live in European Union states by purchasing real estate in Greece has attracted substantial foreign investment.
Prime Minister Kyriakos Mitsotakis, re-elected in June, has been credited with spearheading the recovery by reducing taxes and debt, cutting red tape for businesses, raising the minimum wage, and paying back international bailout money ahead of schedule. The government’s focus now is on ensuring the recovery’s benefits reach a wider population.
Greece’s economic resurgence is indeed remarkable, but it’s a journey still in progress. Challenges remain, particularly in addressing the lingering impact of austerity and inflation on citizens. As the country continues to rebuild and grow, its leadership remains committed to spreading the recovery’s benefits across all segments of society.