With a time bomb on the foundations of the Greek economy, and with the biggest victim of job marketthey look like comparative demographics published by the released EU Yesterday (20.05.2025).
Greece is among the most “aging” EU countries, and no government efforts have managed to prevent the downward course of demographics from the debt crisis onwards. As is reasonable, after the labor market, which gradually “deprives” of potential, follow the insurance system and other areas of our economy.
During the decade of the economic crisis (2011–2021), Greece’s population decreased by about 3%, mainly due to the negative natural balance (more births from births), but also mass immigration, especially new and specialized workers, the so -called Brain Drain. Despite the end of the debt crisis, this trend continues, with Greece recording one of the highest population declines in the EU in 2023, with 0.46%, and in 2024 it continued with a decrease of 0.13%. In short, instead of achieving Brain Gain, there is a wave of fleeing and those who stayed in Greece in the past decade, especially at the ages of 25–35 years.
As a result, among the EU countries, Greece is in the first place on the list of the highest median age on January 1, 2024.
Even more difficult are future prospects if one considers how little children in Greek society are less, either lesser births – with a great deal of economic anxiety for their upbringing – or migrate parents abroad.
In 2004, the percentage of children under 15 in Greece was about 15.3% of the population. From 2004 to 2010, this figure is gradually decreased, reaching around 14.6%. From 2010 to 2018, the rate remains almost stable, with slight fluctuations at 14.6–14.4%.
Since 2019 and mainly after 2020, there is a spectacular fall:
- 2021 falls below 14%.
- In 2022 under 13.8%.
- In 2024, it reaches almost 13.1%, which is the lowest percentage of 20 years.
What are the impact on the Greek economy
The impact of the above data on the Greek economy are incalculable.
Studies by Eurostat and IOBE report that by 2100 there is a 50% reduction in Greece’s workforce, affecting productivity and economic growth.
The decline in people aged 20-64 years (ie productive ages) leads to a declining work supply and deforestation of the economy’s potential especially in areas with human capital dependence (eg health, education, agriculture).
At the same time, the aging of the population pushes pensions and health care costs, burdening the state budget. Particularly for the insurance system, the ratio of workers to retirees is steadily decreasing, endangering its viability. In 2009 it was 1.9 to 1, today it moves close to 1.3 to 1, proceeding downhill.
It should be noted that spending on pensions in Greece is one of the highest in the EU, by over 16% of GDP with a tendency to grow due to aging.
In addition, the decline in active population working and operating professionally leads to a reduction in tax revenue, limiting the state’s capabilities for investment and social benefits.
The age category of 20-40 years is the main savings and investment population and their reduction limits the domestic demand for mortgage loans, business establishment, private consumption and willingness to take risk, which is essential for investment.
As a result of all of the above, demographic is a hindrance to the evolution of Greek GDP, as it affects the 3 most critical factors, work, capital, productivity.
According to the IMF, Greece is among the countries that will see negative or zero rate of potential growth after 2040 due to its demographic data.
What steps the government takes
The Greek government has announced a national demographic action plan with a budget of 20 billion euros by 2035, which includes tax and other incentives, and various support measures for families.
As a result, it is obvious that they are not sufficient to attract young people back to the country.
Remuneration in Greece, especially in the private sector, are significantly lagging behind those abroad for corresponding specialties. For example, a Greek scientist or engineer who is paid 60,000–80,000 euros a year abroad is required to return with a salary of 1,200–1,800 euros a month in Athens.
The Greek market has insufficient positions for highly specialized professionals as 99% of businesses are media with limited technological or export orientation.
At the same time, despite the efforts to reduce bureaucratic processes and the creation of a favorable tax framework for “foreign tax residents”, the total tax and insurance burden remains a deterrent, as fees do not correspond to tax relief and social benefits of Western Europe.