Paris Skouros pointed to the sky outside her office in Athens on a recent weekday. Over the past six months, four skyscrapers have emerged, built by Greek and international builders to be sold for tourist rentals, foreign real estate investments and corporate offices. Further out, a new crop of new buildings dotted the skyline.
The Greek financial crisis almost ruined his business, Skouros & Fils, an elevator company. Years of harsh austerity measures imposed by international bailouts have been heartbreaking, Mr. Skouros said, as new construction has stalled. But today, an economic recovery is underway.
“During the crisis, we just wanted to survive,” Mr. Skouros said, as the sound of hammers hitting sheet metal echoed in his workshop. “Now we are profitable and our business is so strong that we cannot find enough workers to meet the demand. »
Burdened with a debt it could not repay, Greece almost broke up the eurozone ten years ago. Today, it is one of the most dynamic economies in Europe. Significantly recognizing the country’s recovery, credit rating agencies have improved their assessment of Greek debt and opened the door to large foreign investors.
The economy is growth twice as high as the euro zone averageand unemployment, although still high at 11 percent, is the lowest in more than a decade. Tourists returned in droves, fueling a frenzy of construction and job creation. Multinational companies, like Microsoft and Pfizer, are investing. And the banks that almost collapsed have cleaned up and lend again, which benefits the economy as a whole.
Greece still faces risks. Its debt mountain has shrunk, but at 166% of the economy, it is among the highest in the world. The country’s banks still hold a stock of non-performing loans higher than the European average. And the misery of austerity is still fresh for some, compounded by stubbornly high inflation fueled by Russia’s war in Ukraine.
The country’s Prime Minister, Kyriakos Mitsotakis, a pro-business conservative politician, has been re-elected with an overwhelming majority in June after being credited with boosting the recovery by cutting taxes and debt. The government has cut red tape for businesses and raised the minimum wage. The country is even repaying the money from the international bailout plan earlier than expected.
Mr. Mitsotakis welcomed Greece’s return to investors’ favor. “I will never allow us to relive the trauma of a national bankruptcy,” he said the day after the latest update.
Greece became the center of the European debt crisis after the implosion of Wall Street in 2008. Ireland, Portugal And Cyprus were also forced to resort to international bailouts. But Greece suffered the worst, requiring three bailouts from 2010 to 2015, totaling 320 billion euros, or $343 billion, with bitter austerity conditions. Household incomes and pensions have been reduced. The economy contracted by a quarter and hundreds of thousands of businesses collapsed as banks closed. In 2013, almost a third of Greeks were unemployed.
“We would have liked austerity to be softer, but these measures constitute Greece’s contribution to its own rescue,” said Yannis Stournaras, former finance minister, governor of the Greek central bank and member of the board of directors of the European Central Bank. “Greece had to take difficult measures to survive. »
Greece exits strict fiscal controls from bailout programs in 2018, and the government’s actions since then have earned the trust of the European Union. In 2021, Brussels decision-makers approved an additional 30 billion euros for climate investments in Greece, as part of a wider effort to support EU economies following Covid-19 lockdowns.
This month, DBRS Morningstar, a global credit rating agency recognized by the European Central Bank, has upgraded Greece’s debt rating to investment grade, a move that opens the door for pensioners and other large investors to buy government-issued bonds . And it will reduce borrowing costs for households, businesses and the government after the ECB raised interest rates to combat inflation.
Moody’s, one of the largest credit rating agencies, raised Greece’s debt rating on September 15 by two notches, just below investment grade, citing “a profound structural change” in the country’s economy, finances and banking system.
Investors are getting started. Microsoft is building a billion-euro data center east of Athens. Further north, Pfizer anchors a 650 million euro research center. American, Chinese and European companies are proposing agreements in the field of renewable energy. And investments from Cisco, JPMorgan, Meta and other multinationals are expected to have an economic impact worth billions of euros over the coming years.
More than 10 million tourists flocked to Greece this summer despite a series of forest fires, generating revenues estimated at more than 21 billion euros. Construction has increased on the mainland and in popular areas The Greek Islandsdriven by growing demand for hotels, Airbnb rentals and a program which allows foreigners to obtain a Visa live in EU states if they purchase at least €500,000 worth of real estate in Greece.
This activity has supported companies like the one run by Mr. Skouros. The company, which he runs with his brother John, was founded by their father in 1965. When orders dried up during the economic crisis, they survived by maintaining the elevators they had already installed around Athens .
Today, it has elevator controls in 10 buildings, compared to none during the crisis and Covid-related confinements. At around €20,000 per elevator, the company is profitable again. Mr. Skouros raised salaries by 10 percent and hired five additional employees. He needs more technicians, but in a booming economy, he no longer finds any takers.
The recovery is so rapid that Mr. Skouros worries about the formation of a real estate bubble. He therefore avoids new high-rise construction, which he fears could go bankrupt, and targets small residential buildings with healthy finances.
For others, the economic recovery has not yet healed the scars of austerity.
Dmitris Mitrofinakis, 67, has struggled to recover from the closure of the decoration store he ran for more than 40 years, after emptying his personal savings during the crisis to try to save it. When he retired in 2015, the pension he had long contributed to was reduced to 1,300 euros per month, compared to the 2,400 euros he was supposed to receive.
“The austerity imposed on Greece was too strict,” said Mr. Mitrofinakis, who lives with his wife in a modest apartment in a working-class neighborhood, adding that he had little money left at the end of the month.
He sees signs of improvement in the economy. “When you look around, people have more work and higher salaries,” Mr. Mitrofinakis said. “But a lot of other people haven’t recovered,” he said, adding that many of his retired neighbors are struggling to make ends meet.
Roula Skouros, a hotel manager in the city of Tripoli, doesn’t expect Greece’s investment grade rating to improve her life. “Someone who maybe works at the bank or the stock market is probably affected, but not me,” said Ms. Skouros, who is not related to Paris Skouros.
Her salary has always hovered around minimum wage, she said. But with inflation running rampant at the gas pumps and grocery stores, an improving economy “means nothing if you can’t afford gas and food,” he said. said Ms. Skouros.
In a recent speech, Mr. Mitsotakis acknowledged the challenges and pledged to spread the benefits of the recovery more widely. “We’re not hiding behind investment grade and saying, ‘We’ve achieved an important goal: let’s go on autopilot,'” he said.
His government has announced plans to raise the monthly minimum wage to 950 euros by the end of its four-year term, after raising it to 780 euros in April. Public sector wages will also increase for the first time since a 20 percent cut during the crisis to pay Greece’s debts.
For Konstantinos Kanderakis, 62, a supervisor at the Greek Digital Services Agency, the gains are significant. He earns 1,300 euros a month after 35 years in government, and he will benefit from a monthly increase of 100 euros after a decade in which his income declined.
“It’s a big psychological boost,” he says. “Greece is stable again and what I am happy about is that things will get better for my children.”
Niki Kitsantonis contributed reporting from Athens.
