The Greek economy is revived but inequalities still remain strong

A decade ago the Greek economy was shuttered, unemployment at a record high, with no jobs or investments, and young Greeks like me not seeing any future in their homeland and had emigration as their only option. 

But 10 years later the situation has changed! The Greek economy has seen a very strong rise after the end of COVID-19 pandemic and it is fast approaching its pre-crisis size of 2009. As was mentioned in last week's blog, the increase in tourism and investment from Northern Europe helped the Mediterranean economies. Greece is projected to see economic growth above 2% over the next couple of years, which is more than double what is expected for the Eurozone average. 

These are the headline numbers, but what are the actual benefits of the overall economic revival for the citizens that have faced a decade of hardship? Probably the average Greek still hasn’t seen the fruits of their country’s recent economic growth.

Unemployment in Greece is still quite high. It has reduced from 27.5% in 2013 to 11.1% in 2023, but still it is almost double of that of the Eurozone average. Youth unemployment (those aged between 15 and 24 years old) in particular is still a big challenge as it was 26.7% in 2023 compared to 14.4% for the Eurozone average. The fact that Greece is heavily reliant on tourism for its economic recovery has created a volatile labour market focused on seasonal employment, while investment in sectors that could provide a more long term economic stability could help reduce unemployment. 

Despite Greece’s recovery, the income of the Greeks is the lowest in the Eurozone. The average monthly salary of 1,175 euros is 20% lower than 15 years ago. Greece has also the lowest annual average wage in the Eurozone. That has as a consequence made Greece an attractive place for investments as the labour cost (taking into account wages, social contributions and taxes) is one of the lowest in the European Union. On the other hand, Greeks face lower incomes in a period of high inflation and increasing property rents which reduces their living standards and well-being.

Yes, it is true Greece has managed to do the seemingly impossible by balancing the books, taking advantage of the circumstances and despite the odds projected to have a long term period of economic growth. However, the average household hasn’t seen any changes in their lives to the better; higher inflation on food and energy in combination with higher rents and lower wages has seen Greek households still struggling to make ends meet. 

Greece has a period of economic growth and it is time to capitalise on this in order to further reform the economy and promote more stability. The stagnation in the Northern European economies and the struggling budget that European households face will have as a consequence a reduction to funds and tourism towards Greece, which are the main ingredients of the Greek economic revival, potentially putting that revival at risk. That, in combination with the impact of climate change - which already affects agricultural production in Greece and has increased natural disasters like floods and wildfires - doesn’t give the country space for a break. Greece needs to work even harder to improve the standard of living for its citizens and to deal with future challenges.