Greece's Economic Growth Contrasts with Public Discontent
Athens, Greece - Despite a notable economic upturn, public sentiment remains largely negative as many citizens feel disconnected from the country's financial recovery. Recent statistics indicate that Greece's Gross Domestic Product (GDP) grew by an estimated 2.3% in 2024, surpassing the performance of several other European nations. The country's finance minister, Kostis Hatzidakis, expressed optimism about the economic outlook for the coming years, with projections from the European Commission suggesting that Greece will experience growth rates significantly higher than the EU average.
The current economic climate has facilitated a notable improvement in public finances. In the first eleven months of 2024, Greece reported a primary surplus of EUR12 billion, exceeding initial expectations. This financial boost can be attributed, in part, to the government's efforts to combat tax evasion and implement prudent fiscal policies. Over the last four years, Greece successfully repaid EUR24 billion in financial aid ahead of schedule, achieving a remarkable 56 percentage point reduction in its debt-to-GDP ratio, which positions the nation as a model for fiscal recovery within the EU.
Yet, the tangible benefits of this economic revival remain elusive for many Greeks. Years of austerity measures and economic hardship stemming from the debt crisis in the 2010s have left deep scars. The substantial financial aid received from European partners and the International Monetary Fund helped avert immediate bankruptcy, but the accompanying austerity measures plunged the nation into one of the most prolonged recessions in modern history. The economic output fell by approximately 25%, and households saw their wealth diminish by around 40%.
According to Giorgos Papakonstantinou, an economist and former finance minister during the crisis, the repercussions of that tumultuous period continue to be felt more than a decade later. He likens Greece's situation to the Great Depression in the United States, emphasizing that while the U.S. managed to recover relatively quickly, Greece's struggles have persisted, particularly in terms of rising social inequalities and declining purchasing power. Currently, the average gross salary for full-time employees in the private sector stands at EUR1,325, a decline from EUR1,379 in 2009. After accounting for inflation, real incomes are nearly 24% lower than they were pre-crisis.
In response to growing public dissatisfaction, the Greek government, led by Prime Minister Kyriakos Mitsotakis since 2019, has attempted to balance pro-business policies with social welfare initiatives. The administration has implemented substantial financial support measures for citizens during the pandemic and ongoing energy crises. The minimum wage has increased from EUR650 to EUR830, with plans for further raises to EUR950 by 2027, coupled with aspirations to elevate the average salary to EUR1,500.
However, many citizens remain impatient for substantial improvements. Recent polls reveal that two-thirds of respondents believe the country is heading in the wrong direction, and a similar proportion rates the government's performance unfavorably. This growing discontent poses a significant challenge for the ruling New Democracy party, which has seen its approval ratings drop from 41% to around 31% since the last elections.
The rise in dissatisfaction has also benefitted right-wing populist parties, such as the nationalist and pro-Russian Greek Solution party, which has seen its support nearly double in recent months. If this trend continues, these parties may soon emerge as a formidable political force in Greece.
