The Greek economy is on the rise after a decade of pain.

Ten years ago, Greece was going through a terrible debt crisis, accompanied by years of harsh economic policies, hardships, and unrest. However, now officials and investors say that 2024 could be the year it completes its recovery. The Greek economy is projected to grow by nearly 3% this year, approaching pre-crisis levels from 2009 and significantly exceeding the eurozone average of 0.8%.

The cost of borrowed funds has fallen below Italian rates.

and banks bailed out during the crisis are to be fully privatized for the first time in decades - a move some of the country's biggest investors see as the ultimate sign of normalization. "With state involvement out of the picture, this is a watershed moment," said Wim-Hein Pals of management company Robeco, which recently bought shares in Greek banks. "The Greek economy is in good shape to benefit from further growth later on."

A turn in Greece

The debt crisis that threatened to bring down the entire eurozone is striking - albeit on paper. Now the country is facing a new problem: a slowdown in growth in the same eurozone giants that once imposed strict reforms on its economy. After many years of isolation from international markets, Greece returned to an investment-grade credit rating in 2023.

• When the state financial support fund sold its stake in Piraeus Bank, one of the largest banks in the country, last month, the sale was oversubscribed by eight times.
• However, challenges remain. The decline in birth rates and labor shortages threaten long-term prospects, while the spread of climate disasters, such as fires and floods, puts a strain on public finances.

Many ordinary Greeks who suffered through the crisis say they see little difference, while economists say the broad benefits of recovery will take time. For long-term growth, the country needs to diversify its economic spectrum beyond typical industries such as tourism, real estate and services. More than half of foreign direct investment in Greece, which totaled about 7.5 billion euros in 2022, comes from northern European countries such as France and Germany, which are struggling with low growth.

Greek exports

Agricultural products, fuel, and pharmaceuticals - two-thirds of which are supplied to the EU - fell by almost 9% last year. Economic growth slowed to 2% in 2023, partly due to lagging neighbors. "Lower growth expectations in Europe are affecting Greece in two main ways.

FINANCES REVIVE

Decades of rampant tax evasion and overspending caught up with Greece in 2009, when it first slid into recession and the government declassified huge deficits in its finances that sent shockwaves around the world. By 2015, Greece had reached three financing agreements with the eurozone and the International Monetary Fund worth 280 billion euros. In return, it agreed to austerity measures that slashed public sector wages and pensions, and acted as a source of mass protests for years.

Calm has mostly been restored.

In Syntagma Square in Athens, where 10 years ago protesters were throwing Molotov cocktails at the security forces in response to harsh austerity measures, today street musicians entertain tourists sitting in the shade of bitter orange trees. Visits to the Acropolis, Greece's most famous ancient monument, reached 3.8 million in 2023, nearly four times more than during the crisis.

The inequality remains.

However, for many Greeks, the economic recovery has not translated into improved living standards. The unemployment rate remains above 10%, the second highest in the EU after Spain, and GDP per capita in purchasing power parity is one of the lowest in the bloc, according to Eurostat data. The average monthly salary of 1,175 euros is 20% lower than it was 15 years ago, according to the Ministry of Labor.

• Greece needs to develop sectors where investments are more long-term, IOBE's Vettas said, "like infrastructure projects and manufacturing."
• Unions held a nationwide strike on Wednesday, during which trains, buses, ships, and taxis were halted, and hundreds of people took to the streets demanding higher wages.

Some people have never been able to recover from the loss of everything during the economic downturn. Periklis Friganas took out a loan from the bank in 2009 to expand his motorcycle repair shop in Athens, but the crisis reduced his turnover by 90% over the next six years. He closed the shop in 2020 and recently lost the apartment he shared with his unemployed wife and three sons after using it as collateral for the loan. "The crisis broke many people, and I was one of them," said Friganas, 61. "Things are only getting better for the 'rich'; everyone else is just losing."