A new laudatory article about the course of the Greek economy, this time from the newspaper Time of Germany, entitled “The economic situation of Greece: What no one expected”
As noted in the Zeit article, “Greece’s public debt was legendary. Now the economy is growing faster there than here (ie in Germany)’, and the editor wonders ‘how can this be?’
In the text it is characteristically noted that “for a number of years being the Minister of Finance of Greece seemed to be the worst government position in the whole of Europe: You had to manage billions of debts. In between, you had to beg for a little money from banks and foreign partners so that hospitals and schools could somehow continue to function while their employees continued to strike for more wages. And on top of that, they could feel the breath of the licentious Germans on their necks.”
The article is prefaced by Felix Keßler and Zacharias Zacharakis – published in the newspaper’s print edition and website – recalling Wolfgang Schäuble’s infamous ultimatum “On the 28th at midnight, the end”, in February 2015.
At the time, as is characteristically noted, everything showed that “Greece, this cultural core of Europe, would never be able to stand on its own feet economically”, but today, a decade after the peak of the crisis, the situation is completely different, they comment the columnists citing relevant videos of the Minister of National Economy and Finance Kostis Hatzidakis on TikTok, where he talks about his meetings at the World Bank and the International Monetary Fund Fund, he appears “to be in an extremely good mood, shaking hands a lot and taking even more selfies with his colleagues”, boasting that Washington is recognizing the great progress made in Greece’s economy over the past five years.
At the same time, there is good news: “While the economy in Germany is stagnant, growth of more than 2% is expected in Greece.” The EU forecasts a budget surplus of 3% of economic output for Greece at the end of this year. Even in 2025, the Greek state will continue to earn more money than it spends, if debt repayment is not taken into account. This is a structural surplus. The opposite of what plagued Greece and what the country was almost famous for.”
Furthermore, it is noted that the situation is so good for Greek households that Prime Minister Kyriakos Mitsotakis announced the early repayment of the public debt with 5 billion. euros early next year, the article explains, adding that “Greece seems to have transformed within a decade from Europe’s problem child to a model student.”
The reduction of undeclared work through the digitization of the payment system – resulting in a significant increase in tax revenues – the development of tourism – which implies the stimulation of other sectors, such as agriculture or the construction industry – and the strengthening of high foreign private investments , are the factors that contributed to this change, the authors note, concluding however with a remark by the Professor of Economics of the Kapodistrian University of Athens Dimitris Katsikas, that, overall, Greece is on the right track from an economic point of view, but the recovery does not reach all citizens, as the improved economic situation and new credibility in the financial markets attract more investors, especially in the construction sector, resulting the increase in rents which, combined with the inflation of the eurozone, makes the position of citizens difficult, hence the recent general strike that paralyzed the country, while at the same time the ruling party which received around 41% in the 2023 elections, has fallen by ten percentage points in the latest polls.
Also in another article from the Editors’ Network of Germany (RND), entitled: Should have been paid by 2028 – Athens repays 8 billion early euros of aid loans from euro partners, it is noted that “the Greek government is reducing its debt faster than planned. Greece is still the most over-indebted country in the EU. But not for long.”
Ger Höhler’s response from Athens refers in detail to the early repayment of the Greek public debt, explaining that with the current payment of almost eight billion 135 million euros are saved from the 2010 rescue package. euros from interest resulting in the reduction of the country’s debt to 154% of GDP by the end of this year.
Under the interim title “Stronger economic growth than in the rest of the EU”, the correspondent refers to the statements of Prime Minister Kyriakos Mitsotakis – related to the repayment and the good performance of the Greek economy – explaining that “even after Friday’s early repayment , the Minister of Finance Hatzidakis will have a liquidity reserve of approximately 30 billion. euros”, i.e. “about half of last year’s total tax revenues”, which demonstrates the very state of the country’s economy despite its high debt ratio.
The European Commission and the IMF consider that Greece’s public debt is sustainable. The reason lies in the structure of the debt. About three-quarters of the national debt is held by public creditors, such as the European Stability Mechanism (ESM). Interest rates are permanently low and Greece has by far the longest remaining debt maturity of any EU country. Finally, it is underlined that Greece is in a much better position than France and Italy, but also countries such as Belgium and Austria, which will be expected to see their debt ratio, unlike Greece, increase further until 2034. If this course continues, Italy will be the one to succeed Greece in the public debt sector, which now has the recognition of four of the five major rating agencies for its financial stability, while according to its Governor Bank of Greece, Yannis Stournara, in 40 years the country will be able to conquer the goal of the upper limit of the national debt ratio (60% of GDP) based on the Stability Pact.