In December 2010, Kostis Hatzidakis was mobbed by demonstrators outside the Greek Parliament. A simple rank-and-file New Democracy (center-right party) MP at the time, albeit a former minister and notably responsible for the privatization of Olympic airline, he was attacked and ended up with a bloodied face. A photo showing him visibly in shock went viral.
Almost 13 years later, in his corner office with a magnificent view of the same parliament building, the man who is now Greek minister of the economy is savoring the progress that has been made. After a historic depression, the Greek economy has returned to growth over the past three years. The figure should reach 2.5% in 2023 and 2.0% in 2024, well ahead of the rest of the eurozone (at 0.7% and 1.2% respectively). As a symbol of this improvement, the S&P rating agency removed Greece of its junk bond status on Friday, October 13.
"For the last decade, our aim was to stay in the euro[zone]. We came very close to disaster. The objective of the current decade, for Greece, is to converge our economy towards the European average." Today, gross domestic product (GDP) per capita is just 68% that of the European Union (EU), making it the second lowest of the 27 EU member states, ahead only of Bulgaria.
There is no question, however, of the government increasing its spending. Year after year, it wants to continue posting a "primary" budget surplus (before interest payments on debt), which enables it to reduce its public debt. "We can't perform miracles," stressed Hatzidakis, recalling that after the scale of the crisis that shook Greece, whose economy remains 20% below its 2007 level, reconstruction will necessarily be slow.
"[Primary surpluses] are not only a precondition to reducing our debt but also a way of proving that we have learned from the past, changed our mindset and are adopting international best practice." Greece's debt, which reached 206% of GDP in 2020, today stands at 159% and should fall to 152% by the end of 2024, taking advantage of both inflation and the country's significant growth to mechanically reduce this ratio.
Public services, bled dry after years of austerity measures, will have to wait, even if Hatzidakis would like to help out hospitals, which have been hit particularly hard. He promises to recruit 15,000 healthcare staff over the next few years. As for the civil service, the rule is now to stabilize the headcount, with one new recruit for every departure, whereas downsizing has long been the norm.
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