Impressive recovery Greece: economy booming

The Greek economy is on the rise. The country is no longer the troubled child of Europe. After years of crisis, the Greek economy grew by almost six percent last year, surpassing the Dutch growth of 4.5 percent.

For Greeks, this feels like the near future: in 2010, when it was revealed that the government had cheated on budget figures. Greece was almost bankrupt. The International Monetary Fund (IMF) and European countries came to the aid with billions of dollars in aid, in return Greece had to cut its spending. The tax and legal systems also needed to be reviewed.

The cuts sparked massive protests in Greece. But it worked, says Greek economist Miranda Xafa. Many reforms were made, not only in terms of taxation, but also to make the economy more efficient.”

Higher retirement age

Xafa worked at the IMF during the crisis and advised the Greek government on necessary reforms. “For example, the retirement age was raised, labor market rules were relaxed, and companies were given more room to compete with each other.” Xafa believes that these reforms have contributed significantly to the recovery of the Greek economy.

According to the economist, last year’s growth came from two sources: reforms and investments. “We have a centre-right government that has implemented many pro-market reforms since 2019. Investments come from the EU bailout fund, but also from private sources.”

Unemployment has also fallen in recent years. At the lowest point of the crisis, 27.5 percent of the Greek workforce was unemployed. Unemployment is currently below 11 percent.

However, not everyone notices economic growth. “Everything is getting expensive in the supermarket, the bills are going up. Now you have nothing.”

Economist Xafa emphasizes that Greece, like the rest of Europe, is struggling with high inflation, but its average per capita income has also increased by seven percent. “Of course there are people whose incomes have increased less, but their lowest incomes have increased with inflation.”

The sectors that grew the most were tourism, energy and construction. Contractor Dimitris Protonotarios notes this success. “There is a lot of interest in buying flats in Greece,” he says, in an upscale Athens suburb where he helped build a luxury apartment complex.

It used to be different. In 2009 the construction industry went into free fall and in 2014 it was completely over. Protonotarios are happy with the current growth. “After years of few jobs, I now have a lot of work instead of very little.”

Train disaster due to budget cuts?

The state of the economy will play an important role in Greece’s election campaign next month. Prime Minister Kyriakos Mitsotakis’ party fell from the polls after a train crash last month that left 57 people dead. Greeks took to the streets en masse to protest. The rail network was in poor condition due to the blackouts.

It is unclear whether the ruling party will become the largest party again. “The outcome of the elections will decide whether reforms take place or not,” says Xafa. “If another party becomes the biggest, we can go backwards.”

Still, Xafa is positive about the future of the Greek economy. “Greece has large reserves and could pay off its foreign debt in the coming years.” He expects economic growth to weaken somewhat: “I don’t think we’ll see six percent growth again, but as for three percent, it’s still better than the EU average.”

Contractor Protonotarios is also optimistic. “The future looks good. Investments continue. We may be a year or two behind other countries, but we are on the right track.”

Source: NOS

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