AI Takeaways
Summary of key points with the help of artificial intelligence
- Greece’s strong GDP growth masks a persistent gap in real incomes and living standards compared with the EU average.
- Wage convergence with Europe has stalled, while purchasing power continues to lag behind even Balkan economies.
- Growth has been driven largely by consumption, tourism, and real estate rather than productivity-enhancing investment.
- EU Recovery Fund resources were used more as short-term stimulus than as a tool for long-term economic transformation.
- Without a shift in investment strategy, Greece risks long-term divergence rather than convergence with Europe.
Greek Prime Minister Kyriakos Mitsotakis often repeats a simple and reassuring line: Greece is among the fastest-growing economies in the Eurozone.
On the surface, the numbers seem to back him up. Greece’s GDP growth has indeed outpaced that of several major Eurozone economies in recent years. Compared with the stagnation of Germany, France, and Italy, Greece appears to be doing remarkably well.
But this comparison obscures more than it reveals. Growth, in itself, is not prosperity — and certainly not shared prosperity. When one looks beyond headline GDP figures and examines the real economy — how people work, earn, and live — a very different picture emerges.
That reality is laid bare in the latest interim report by the Labour Institute of the General Confederation of Greek Workers (INE-GSEE).
First, Greece’s growth performance is far less impressive when viewed in a broader European context. Several EU countries, both inside and outside the Eurozone — particularly in Eastern Europe and the Balkans — are currently growing faster. Greece’s relative strength exists mainly in comparison with the sluggish “core” economies of the Eurozone, not with its closest regional competitors.
More telling, however, is the persistent gap in living standards between Greece and the rest of Europe. According to the INE-GSEE report, the difference in real per capita income between Greece and the EU average stood at €15,010 in 2019. By 2024, after five years of Mitsotakis’ premiership, that gap had barely narrowed, remaining at around €14,600.
Measured in purchasing power standards (PPS), Greece’s per capita GDP rose from 65.5% of the EU average in 2019 to 68.5% in 2024. Yet other countries improved far more rapidly. Today, Greece trails behind the Czech Republic, Lithuania, Estonia, Poland — and even Romania, once considered a symbol of post-communist underdevelopment. In fact, Greece now outperforms only Bulgaria, and even there the pace of convergence has been faster than Greece’s.
The situation is even worse when it comes to wages. In 2009, the average annual wage in Greece, adjusted for purchasing power, stood at nearly 92% of the EU average. By 2019, that figure had collapsed to 61%. In 2024, it fell further to just 59%.
In practical terms, this means that Greek workers are steadily losing ground compared with their European counterparts — despite years of “strong growth.”
Hourly wages tell the same story. In 2024, Greece’s average hourly wage in PPS terms was significantly lower than in Central and Eastern Europe, the Balkans, and the EU’s southern periphery. Across industry and services alike, Greek workers earn substantially less than workers in economies often portrayed as poorer or less developed.
These trends are reflected in a range of social indicators, including material and social deprivation. While conditions have improved compared with the depths of the crisis, Greece continues to lag behind the EU average — and behind countries not traditionally considered affluent.
The government’s narrative that growth is driven by investment fares little better under scrutiny. Yes, investment as a share of GDP has increased. But the composition of that investment is deeply problematic.
According to the INE-GSEE report, investment in housing surged from 7.1% of total investment in 2019 to 19% in 2025. Meanwhile, investment in machinery declined, as did spending on technology, information systems, and communications. This is not the kind of investment mix that supports productivity, innovation, or high-value-added sectors. It is the kind that fuels asset inflation — not sustainable development.
As EU Recovery Fund resources begin to dry up, the limits of this growth model will become even more apparent. The government itself has acknowledged that nominal growth rates are expected to slow after 2027.
Mitsotakis came to power in 2019 under uniquely favorable conditions. The bailout programs had ended, debt fears had eased, and Greece’s standing in Europe had improved. The pandemic was a major shock — but it was followed by unprecedented EU support through the Recovery Fund.
This was a rare window of opportunity to reshape the Greek economy, boost productivity, and put the country on a genuine path toward convergence with Europe.
Instead, growth was pursued through consumption, real estate, and tourism — the easiest options — while European funds were treated more as liquidity injections than as instruments of transformation.
The result is an economy that grows without catching up; a society that feels poorer despite positive headlines; and a country that risks long-term divergence from Europe — even as its leaders celebrate short-term success.
