Greece is witnessing a remarkable turnaround as the nation reports an unexpected budget surplus, sharply increasing from 6.1 billion euros to 13.5 billion euros for the upcoming fiscal year. This positive development has not only caught the attention of economists but also injected renewed hope among the citizens.
During recent parliamentary discussions, Prime Minister Kyriakos Mitsotakis emphasized the importance of ensuring this economic success reaches the people more directly. Expressing the sentiment of many Greeks struggling with the ramifications of past financial crises, he stated, “The important thing now is for the economic success to reach the people more strongly.”
Central to this budget surplus achievement is Finance Minister Kostis Hatzidakis, who has exercised fiscal prudence, as noted by local experts. According to them, “Chatzidakis has managed frugally,” contributing significantly to the turnaround of the Greek economy.
Key factors behind Greece's impressive fiscal performance include stringent measures against tax evasion and the privatization of state assets. Over the last five years, the government has effectively halved the losses due to tax fraud, amounting to 3.2 billion euros by digitalizing tax administrations. This effort, alongside additional revenues from privatizations—expected to bring 5.8 billion euros by 2024, including 3.3 billion euros from the concession for Athens' city highway—have helped bolster the state’s coffers.
While discussing future economic projections, reports indicate Greece's growth rate outpacing the EU average. While the European Union anticipates growth of just 0.9 percent, Greece's economy is expected to grow by 2.1 percent this year and to reach 2.3 percent by 2025. This positive outlook is bolstered not only by the booming tourism sector but also by the government regaining market confidence.
International rating agencies have deemed Greece once again worthy of investment, attracting big names like Microsoft, Google, and Pfizer to establish operations within its borders. This influx of foreign direct investment is not only aiding the economy but also symbolizing Greece's redeeming status on the international stage.
Despite these encouraging signs, challenges remain, primarily concerning the day-to-day lives of Greek citizens. The residual effects of the austerity measures during the financial crisis, which spanned from 2010 to 2018, have left many individuals and families still struggling. While there have been some modest increases to pensions and minimum wages, the growth is gradual.
For the coming year, the government plans to increase pensions by 2.4 percent and incrementally raise the minimum wage from 830 euros to 950 euros by 2027. Alongside these initiatives, both employers and employees are set to benefit from reductions of 0.5 percent each on social insurance contributions. The government aims to bolster the economic potential of its citizens with these adjustments.
One of the most pressing issues still plaguing Greece is the high unemployment rate, which, though improving, remains substantial. For 2024, the government forecasts joblessness will decline to below 10 percent, down from the staggering 40 percent during the peak of the crisis, though this improvement will need time to reflect on living conditions.
Greece has also been diligent with its debt obligations, making timely payments to international creditors and even prepaying its crisis loans to the International Monetary Fund. Projections show the nation's debt-to-GDP ratio dropping from 164 percent two years ago to 147 percent by 2025, marking substantial progress toward economic stability.
Another significant aspect of the budget surplus is its allocation toward defensive expenditures. The Greek government has proposed near-doubling its defense budget from 3.6 billion euros to 6.1 billion euros, driven by geopolitical concerns, predominantly due to long-standing tensions with Turkey. This move has garnered widespread support, even from opposition parties.
With the proposed upgrades to Greece's military capabilities, including the acquisition of modern drone systems, the government emphasizes the importance of national security amid regional instability.
Through all these efforts, Greece is not just focused on economic metrics but is actively working to translate this surplus and growth back to the populace, striving for improved quality of life for its citizens moving forward. The nation's resilience is promising, yet the road to recovery remains long, laden with responsibilities to uplift those still affected by the shadow of financial hardships.
