Eight years after nearing economic collapse, Athens attracts global giants

Big fat Greek recovery: Eight years after nearing economic collapse, Athens now attracts global giants

Athens, in the darkest days of Greece’s debt and economic meltdown, was a desolate place.

Towering cranes were frozen in aspic on unfinished buildings. Paving stones lifted and hurled at police by demonstrators littered the streets. Cars burned in central Syntagma Square. Every spare inch of wall space was covered in graffiti and the country’s educated elite, including financially struggling medics, fled overseas.

By February 2012 some 20,000 citizens were homeless and more than 20 per cent of the shops in Athens’ historic centre lay derelict.

Politics were incendiary. The country’s hipster, motorcycling finance minister Yanis Varoufakis toured the EU’s TV studios demanding forgiveness of Greece’s debt mountain of £240 billion as Brussels and the International Monetary Fund (IMF) sought to punish the country for running roughshod over eurozone rules. 

The yield on Greek government bonds reached an astonishing 44 per cent in 2012. The crisis came to a head in 2015 when the country needed a bailout.

Unrest: Protesters walk through tear gas during a general strike in Athens

No one could have imagined that less than a decade later, Greece would rise phoenix-like from the ashes to become Europe’s fastest growing economy. Or that the New Democracy party, led by Harvard-educated prime minister Kyriakos Mitsotakis, would be able to boast enough achievements and economic success, in spite of damaging scandals, to win the elections this month. 

Although his party received the most votes, Mitsotakis is still short of a majority – though another ballot in June will seek to clinch this.

Mitsotakis’s popularity looked to have taken a serious hit from a phone-tapping scandal, involving politicians, the media and the security services. He was also blamed for a train crash in February which claimed 57 lives.

In spite of such setbacks, Mitsotakis has managed to endear himself to embattled citizens and also repaired relations with Brussels.

The predecessor administration of the Left-wing Syriza party was so alienated from Brussels and its cruel policies of austerity and job destruction, which saw 25 per cent of national output wiped out, that it seemed inevitable that the country would be forced out of the eurozone.

The big fat Greek recovery is a parable of our times. The country has been propelled back to the land of the living by strong government support, a fabulous revival of tourism, booming exports and improving investor confidence.

Since the pandemic a 250,000 jobs have been created, reducing unemployment to 11.6 per cent – the lowest level in 12 years. In 2012 it reached an alarming 24.4 per cent, almost a quarter of the workforce. Greece’s debt crisis, which began in 2010, saw the country require three international bailouts.

But the pandemic gave Athens the chance to regroup. Armed with generous post-pandemic aid from Brussels and some smart and creative economic thinking by the New Democracy government, life in Greece has been transformed.

Key to recovery has been rocketing domestic and foreign investment, up an impressive 44 per cent since mid-2019 when the present administration took office. Among global giants attracted to Greece are Microsoft and Pfizer.

There is much to be fixed. The debt to GDP ratio stands at a biblical level 177 per cent. The Paris-based OECD says there is much to be done to reduce high rates of poverty, improving gender equality and restoring a budget surplus.

Nevertheless, the EU’s weakest link has achieved a return to a degree of prosperity that no one thought possible just a few short years ago.

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