Athens Greece, which shook the entire EU with its debt crisis in 2008, is increasingly recovering economically after 16 tough years - after the country was placed under EU supervision adn harsh austerity measures were implemented.While the economies of other EU countries are weakening, Greece even has a luxury problem right now. Twice as much money is available for the 2025 budget than previously estimated. The spending plan had to be adjusted upward accordingly. The budget was approved by parliament on Sunday evening. Conservative Prime Minister Kyriakos Mitsotakis told MPs that it is now importent for economic success to reach the people more strongly.
greece expects a budget surplus of 13.5 billion euros
Finance minister Kostis Hatzidakis had initially envisaged a budget surplus of 6.1 billion euros in his draft budget. Now this figure has reached 13.5 billion. According to Greek financial experts, this is definitely due to Hatzidakis’ economic management of the budget. Though, there are other critically important reasons for this windfall.
fighting tax evasion
First, the crackdown on tax evasion is yielding results. The digitalization of tax authorities has made it possible,among other things,to reduce VAT fraud,such as through undeclared work. The resulting losses have been halved in the last five years to 3.2 billion euros. The conservative government also continues privatizations. It is expected to generate 5.8 billion euros in revenue in 2024, with the state earning 3.3 billion euros from the Athens city highway concession alone.
There is also the economy, where Greece performs better than many other EU countries. While the EU average is 0.9 percent, the Commission predicts a growth of 2.3 percent for Greece in 2025,following a growth of 2.1 percent this year.
Holidaymakers and investors
This is not only due to the revival in the tourism sector. The government also managed to regain the confidence of the markets. International rating agencies onc again find the country worth investing in. Microsoft, Google and Pfizer have settled here in recent years, and German companies such as Fraport, RWE, Boehringer Ingelheim and Teamviewer also operate in Greece.
rising incomes
Even though the government has repeatedly increased pensions and the minimum wage, the improvement is only slowly reaching the people. While a 2.4 percent increase in pensions is planned for next year, it is indeed envisaged that the minimum wage, which is 830 euros per month, will be gradually increased to 950 euros by 2027. In addition, employees and employers will each have to pay 0.5 percentage points less social security premiums in the future. These and other measures aim to help people get back on their feet.
Crisis loan paid early
Unemployment, which was over 40 percent at the peak of the crisis, will fall below 10 percent next year. The country is also paying off its debts like a model student: debts to international creditors are being paid off, and Athens even repaid its crisis loan from the International Monetary Fund (IMF) ahead of schedule. The national debt ratio,which was 164 percent two years ago,is expected to drop to 147 percent in 2025.
What are the key factors driving Greece’s economic recovery after years of austerity measures?
Interview between Time.news Editor and Economic Expert on Greece’s Recovery
Editor: Welcome to Time.news. Today, we are discussing Greece’s remarkable economic turnaround after 16 challenging years. Joining us is Dr. Eleni Stavrou, an expert in european economics. dr. Stavrou, Greece has been under EU supervision and faced harsh austerity measures since the debt crisis in 2008. How would you assess Greece’s current economic situation?
Dr. Stavrou: Thank you for having me. Greece’s recovery is indeed a standout story within the EU. The recent government budget approval, which reveals a projected surplus of 13.5 billion euros, reflects important progress.This is nearly double the initial estimate presented by Finance Minister Kostis Hatzidakis. The country is shifting from crisis management to economic growth, which is crucial for its long-term stability.
Editor: speaking of the budget surplus, what do you attribute this financial windfall to?
Dr. Stavrou: There are multiple factors at play. Primarily, the crackdown on tax evasion through the digitalization of tax authorities has shown impressive results. Reducing VAT fraud has been a key achievement, cutting losses to 3.2 billion euros over the past five years. Additionally, continued privatization efforts are expected to raise substantial revenue, particularly from key infrastructure projects like the Athens city highway concession.
editor: It’s encouraging to see such improvements. You mentioned the tourism sector as a component of Greece’s economic resurgence. how significant is this industry in the current recovery phase?
Dr. Stavrou: Tourism is indeed pivotal. Greece has historically been a popular destination, and the recent revival in this sector contributes substantially to economic growth. Post-pandemic recovery has seen increased inbound tourism, leading to job creation and higher consumer spending.This, alongside budding confidence from international markets, has attracted investments from major corporations, including Microsoft and Pfizer, which further bolsters Greece’s economic landscape.
Editor: With increasing foreign investments and a growing economy, are Greek citizens feeling the benefits yet?
Dr. Stavrou: that’s a critical question.While the government has initiated pension increases and plans to raise the minimum wage to 950 euros by 2027, the economic benefits have been gradual for the average citizen.This slow trickle-down effect is concerning, especially when juxtaposed against rising inflation. It’s essential for the government to ensure that recovery reaches all demographics effectively.
Editor: Unemployment rates are also a major concern. Can you provide insight into the current unemployment trends in Greece?
Dr. Stavrou: Certainly. Unemployment in Greece peaked at over 40 percent during the crisis. However, projections estimate it will drop below 10 percent next year, which is encouraging. the government’s measures, including the early repayment of its IMF crisis loan, signify a strong commitment to fiscal responsibility. These efforts are essential not just for economic stability but also for restoring public confidence.
Editor: Given these developments, what is your advice for investors and local businesses looking to navigate this evolving landscape?
dr. stavrou: For investors, Greece presents a unique chance. As a recovering economy demonstrating consistent growth—predicted at 2.3 percent for 2025—investors should consider sectors like technology, sustainable tourism, and infrastructure. Local businesses should adapt to the increasing market confidence by seeking partnerships with foreign firms and tapping into digital innovations. Fostering a more inclusive economic policy will ultimately benefit everyone involved.
Editor: Thank you, Dr. stavrou, for your invaluable insights into Greece’s economic recovery. It’s engaging to witness the transformations taking shape in the country.
Dr. Stavrou: Thank you for having me. Greece’s journey is a testament to resilience,and I look forward to seeing how it continues to evolve in the coming years.