In 2008, the Greek sovereign debt crisis shocked the entire EU. Sixteen years later – after the country was placed under EU tutelage and drastic austerity measures were introduced – the country is increasingly recovering economically. Because while the economies of other EU countries are weakening, Greece currently has a luxury problem.
More than twice as much money is available for the 2025 budget than predicted. The expenditure planning therefore had to be adjusted upwards. The budget was adopted by parliament on Sunday evening. It is now important that economic success reaches people more deeply, Conservative Prime Minister Kyriakos Mitsotakis told MPs.
Greece expects a budget surplus of 13.5 billion euros
Finance Minister Kostis Hatzidakis had initially expected a budget surplus of 6.1 billion euros in his draft budget. Now it is 13.5 billion. This is certainly due to the fact that Hatzidakis was frugal, say Greek financial experts. But there are other important reasons for the windfall.
Fight tax fraud
On the one hand, the tough fight against tax evasion is paying off. The digitalization of the Tax Authorities has made it possible, among other things, to reduce VAT fraud, for example through undeclared work. The resulting losses have halved to 3.2 billion euros over the past five years. Moreover, the conservative government continues to privatize. This is expected to generate 5.8 billion euros in 2024; the state alone has earned 3.3 billion euros from the concession for the urban highway in Athens.
And then there is the economy, where Greece is performing better than many other EU countries. While the EU average is 0.9 percent growth, the Commission expects Greece to grow by 2.3 percent in 2025, after 2.1 percent this year.
Holidaymakers and investors
This is not only due to the flourishing tourism sector. On the contrary, the government has managed to regain the confidence of the markets. International rating agencies once again consider the country worth an investment. Microsoft, Google and Pfizer have established themselves in Greece in recent years and German companies such as Fraport, RWE, Boehringer Ingelheim and Teamviewer are also active in Greece.
Despite the good development, Mitsotakis warns to keep the ball flat. The reason for this is the continued relative poverty of Greeks, whose pensions and wages were cut during the country’s financial crisis from 2010 to 2018.
Income increases
The recovery is slow to reach people, even though the government has repeatedly slightly increased pensions and the minimum wage. A 2.4 percent increase in pensions is planned for next year and the minimum wage of 830 euros per month must gradually rise to 950 euros in 2027. And in the future, employees and employers will each have to pay 0.5 percentage points less social security contributions . These and other measures are intended to help people get back on their feet.
Crisis loan repaid early
Unemployment is expected to fall to less than 10 percent next year – after over 40 percent at the height of the crisis. The country is also exemplary in servicing its debts: loans to international creditors are being repaid, and Athens has even paid off the crisis loan from the International Monetary Fund (IMF) ahead of schedule. The government debt ratio is expected to fall to 147 percent in 2025, down from 164 percent two years ago.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
