As of: March 11, 2024, 8:13 a.m
By: Kathrin Braun
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Tourism in Greece - here at the Acropolis (archive photo - is booming again. © Arno Burgi/dpa
Just a few years ago, Greece was considered the black sheep of Europe - today the country's economy is growing faster than in most other EU countries.
What can you learn from the Greeks?
Munich - The traffic lights had been arguing for weeks about the billion-dollar hole in the budget, but the solution was so simple: Germany could simply sell its islands, Panagiotis Lafazanis recently suggested.
That was only half-serious, but the former minister in Greece's left-wing Tsipras government made no secret of his glee.
“Life is vindictive,” he told the
Bild
newspaper.
“Germany will now experience what it imposed on Greece.”
That sits.
Lafazanis's swipe is no coincidence: “Sell your islands, you bankrupt Greeks,” was the headline in
Bild
in the spring of 2010, when Athens was threatening to suffocate under its gigantic mountain of debt.
For a long time, Greece was considered Europe's problem child, the black sheep that could only cheat its way into joining the euro with doctored deficit figures.
But now, 14 years later, the country stands as a model student - and Germany as the "sick man of Europe": at least that's what foreign media have been writing about it ever since the
Economist
started it last summer.
The British business magazine, however, named Greece the best economy of 2023 a few weeks ago, for the second time in a row.
The analysts spoke of a “remarkable” result.
Greece on the upswing – even before the “mega cycle”?
The country, which just a few years ago had to be saved from a national bankruptcy with loans totaling 289 billion euros, is now officially considered stable again: in the past few months, two of the largest international rating agencies have again classified Greece as creditworthy.
The bank Barclays even predicts a “mega-cycle” for the state, a long-lasting economic boom.
The economy in Greece is already growing twice as fast as the euro zone average: in 2022, gross domestic product (GDP) increased by 5.9 percent.
The EU states together came to 3.4 percent, Germany only 1.8 percent.
At the same time, Greece was able to repay some of the aid loans early.
Since 2013, Greece has also halved its shadow economy, as the International Monetary Fund (IMF) recently confirmed - from 30 percent of gross domestic product to just 16 percent in 2021. According to the IMF, the reasons include stricter prosecution of financial crime and the restriction of cash transactions 500 euro.
The enormous shadow economy was one reason for the national debt crisis.
Economy in Greece: From Tourism to Technology
The most important source of income is tourism.
In 2023, Greece welcomed more holidaymakers than ever before: 20 billion euros in revenue was a new record, and a new all-time high is expected this year.
But Greece wants more.
The Corona crisis has made it clear that the country is too focused on tourism.
Now it wants to become the technology stronghold of Southeastern Europe.
Microsoft is building a one billion euro data center east of Athens.
Other tech giants such as Cisco, Google, Meta and Amazon are also pushing into the Greek market with investments worth billions.
The United Arab Emirates is planning huge data centers in Greece.
In Thessaloniki, Pfizer is planning a research center for artificial intelligence and big data analyzes for 650 million euros.
Euro zone: “Greece has caught up quickly”
“Greece has caught up quickly,” explains Jens Bastian from the Science and Politics Foundation, “albeit from a very low starting point.” Bastian has lived in Greece for the last two decades and was a member of the “EU Task Force for Greece” at the height of the crisis “.
“People abroad are rightly surprised at how quickly Greece was able to recover - but for the Greeks themselves it was anything but quick,” says Bastian.
The population had to pay a high price for the comeback.
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“When the crisis broke out, everything was thrown overboard: suddenly people were faced with up to 30 percent less wages, job losses, a higher retirement age and, above all, with the question: Why is this all happening?
Who is responsible for this?” To this day, says Bastian, there are always new accusations about who brought the crisis on the country.
The domestic political problems are still “very present”.
The unemployment rate is now just over nine percent - the second highest figure in the EU after Spain.
“But you shouldn’t forget: There were already quotas of 25 percent,” says Bastian.
The fact that we are now in the single-digit range is already “a huge success”.
In addition to the tough austerity dictates of lenders, a new construction boom has also paved the way out of the crisis.
Foreign investors took advantage of the bargain prices during the crisis and pumped more and more money into the Greek real estate market.
Americans, Brits and Germans in particular are interested in holiday homes, luxury apartments and real estate for retirement.
Greece, on the other hand, offers attractive tax incentives and 300 days of sunshine a year.
Greece has not yet overcome the economic crisis
Despite the upswing, Greece has not yet overcome the crisis, says Jens Bastian.
The mountain of debt has shrunk, but is still huge compared to the EU: at 160 percent of annual economic output, it is one of the highest in the world.
The country is also struggling with chronic problems in its infrastructure.
The train accident a year ago is symbolic of this.
57 people died when an Intercity and a freight train collided.
The accusation was that the rails were poorly maintained.
Bastian: “The accident has revealed how much is still going structurally wrong in Greece.”
The dissatisfaction is palpable: Greece performs poorly in the Better Life Index of the Organization for Economic Co-operation and Development (OECD).
On a scale of 10, the population's satisfaction is only rated at 5.8.
The main reason is the low average income: This is just over 19,000 euros net per capita per year.
The austerity measures have helped the country get back on its feet, but they are still affecting the Greek population, says Jens Bastian.
Everyone still has to “do their part,” he says.
“This is a legacy of the years of crisis.”