Executive Summary
During the period under review, Greece’s political and economic landscape showed notable improvement. As the effects of the COVID-19 pandemic diminished, the economy experienced growth, largely driven by increased domestic consumption and a resurgence in tourism. This economic recovery was further bolstered by heightened private direct investment and substantial contributions from the EU’s Recovery and Resilience Facility. The government also implemented measures to mitigate the surge in energy and consumer goods prices following the onset of the war in Ukraine.
Despite this progress, inflation remained a pressing issue in 2023, particularly affecting salaried workers. Although the economy improved, Greece continued to face significant challenges, including the highest public debt in the European Union, necessitating a cautious approach to fiscal expansion. Moreover, Greece had the second-highest unemployment rate among EU Member States, and a large proportion of the population remained at risk of poverty or social exclusion.
Political stability in Greece improved as domestic tensions, which had periodically flared during the previous decade’s crisis, diminished. This stability was further consolidated following the parliamentary elections of May–June 2023, in which the New Democracy party, having governed alone from 2019 to 2023, was reelected and once again formed a single-party majority government.
The government continued its reform agenda from its previous term, focusing on creating a more investment-friendly institutional environment. It also introduced cash transfers and tax breaks to support vulnerable households and economic groups affected by the pandemic. Further modernization efforts were undertaken in education, pensions, social care, and digital governance, alongside the introduction of sustainable development policies. However, concerns persisted about the government’s ability to sustain its commitment to such an extensive range of reforms.
Democratic institutions in Greece remained strong, with the government avoiding interference in the judiciary and state media. Media pluralism was maintained, civil and political liberties were upheld, and the rights to strike and protest were frequently exercised by discontented groups. Nevertheless, the private media sector remained oligopolistic, and investigations revealed instances of surveillance of select journalists and politicians from both the ruling party and the opposition, which were unresolved during this period. Additionally, bureaucratic obstacles and chronic inefficiencies in the justice system raised concerns about Greece’s capacity to swiftly address violations of the rule of law.
While the government successfully managed the economy and helped society recover from the pandemic’s impact, it faced criticism for inefficiencies in other areas. The response to the wildfires and floods of 2022 and 2023 in central Greece and the Greek islands was rapid, yet the restoration of devastated nature and local economic activities proved insufficient. Furthermore, long-standing issues within the country’s railway system were starkly exposed by a major fatal accident at the beginning of 2023.
During this period, Greece effectively addressed several challenges, including managing a reduced inflow of migrants and refugees. While there were still significant shortcomings in the social integration of these groups, the conditions of their reception and accommodation improved. Additionally, Greece successfully navigated tensions with Turkey to maintain peace.
Looking ahead, the government will need to maintain a delicate balance between promoting further economic recovery, resolving long-standing issues in public infrastructure, public administration, and the justice system, and safeguarding the living standards of social groups at risk of being left behind.