Greece painfully rebuilds its economy after 15 years of depression (2024)

At the Greek Ministry of Finance, the news was eagerly awaited. On the evening of Friday, October 20, the Standard & Poor's (S&P) rating agency announced its long-awaited decision: Greece's rating was upgraded from BB+ to BBB-. A technicality, but highly symbolic: thirteen years after being downgraded to junk bond status, ie the riskiest category, Greece is officially back in the investment grade category. "It's essentially symbolic," admitted Secretary General of the Ministry of Finance Georges Christopoulos, "but I don't think any other country has managed to get back there so quickly."

After a historic depression during which the Greek economy collapsed by 28%, Athens finally seems to have opened a new chapter. First, there was the crisis (2008-2016), then stabilization (2017-2020), and since emerging from the pandemic, a return to growth. This year, despite inflation which has eroded purchasing power, it is expected to reach 2.5%. As for unemployment, which peaked at 28% in 2013, it has fallen back to 11%.

Giorgia Tabaki was surprised to hear that the Greek economy was now doing better. The professional journey of this woman in her forties with metal-rimmed glasses is indicative of the long impoverishment of Greeks over the last 15 years. In 2008, she was traveling around Greece styling bathroom displays in shops. Thanks to generous commissions on sales, she earned nearly €4,000 a month after taxes.

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Government finance statistics

Two years later, after the crisis hit, she lost her job. She then worked for a supermarket chain, earning €1,900 per month. "I changed everything: my apartment, the way I shop, my life," she said. Because of her work, she developed tendonitis problems in her arms and had to stop this summer. She is now a cab driver. "It's true, the economy is better than it was in 2022, but it's a lot worse than it was 15 years ago."

'Worse than the US depression of 1929'

The statistics prove her right. Today, the Greek economy remains 20% below its 2007 peak (by comparison, the eurozone is 12% above). "What Greece has been through is worse than the US depression of 1929," pointed out Dimitri Papalexopoulos, president of SEV, the Greek employers' association. "The fall in the economy was similar [28% in Greece, 29% in the US], but it lasted longer [four years in the US, 1929-1933, eight years in Greece, 2008-2016]." In 2007, Greek gross domestic product (GDP) per capita was three-quarters that of France; today, it's just over half.

The signs of the crisis are everywhere. At the market on Timotheou Street, in a working-class district of Athens, customers all recall a time not so long ago when their purchasing power was much greater. Sofia Soropidou, 74, with a pink gilet and proud look, recounted how her husband's pension had fallen from €2,000 a month to €1,200 following the various austerity plans. Her standard of living dropped but she refused to complain: "We manage to go to the café, to have some leisure time. We're not poor."

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