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Greece’s new century

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As Greece prepares to celebrate the bicentennial of the country’s independence next month, Greece is also poised to enter a new era in its economic development as a modern nation-state.

Greece’s modern history can be divided into several distinct periods. And in the long and often difficult road, Greece has trod over the last 200 years, there have been no shortage of setbacks: economic crises, sovereign defaults, and misguided development policies, combined with wars, poverty, famine, and emigration. And yet, each of those periods has given birth to a new and better Greece that succeeded it.

Greece is entering such a new era now.

The first period of the Greek state, dating from the 1821 War of Independence, was focused on consolidating the nation rather than on building a stable economy. The country was born a runt state, half its current size, carved out of the slowly dying Ottoman Empire. Poor and primarily agricultural, Greece’s first period of economic development culminated in the imposition of international financial controls in 1898. 

From 1898 until the end of its civil war in 1949, Greece gained new territory, developed the foundations of its industrial base and welcomed a small, but significant, inflow of investment and human capital. But the country also suffered through the economic hardships of the Great Depression, political instability, several regional wars, brutal foreign occupation, devastating civil war and the integration of more than a million Greek refugees from Asia Minor.

Since the end of the civil war until today, Greece moved forward economically, with rapid development in the 1950s and the 1960s, and accession to the European Economic Community in 1981. But the oil crises of the 1970s and the accumulation of public debt – despite economic growth – led to the 2008 global financial crisis that pushed Greece into a decade-long financial crisis that erased many of the gains of the preceding twenty years.

But since emerging from special European and IMF oversight in 2018, Greece today is no longer on the margins of Europe and has established itself as a hub of economic activity in the greater region. As we, hopefully, move into the post-COVID-era, Greece is entering a fourth era in its economic development and, to a great extent, by leveraging the Fourth Industrial Revolution.

At the onset of the pandemic, the Greek government met the challenge by intensifying an ambitious reform program and setting new goals for the country. As a result, three areas, in particular, stand out as emerging growth drivers – innovation, life sciences, and green energy.

Innovation and high-tech moved to the top of priorities for policymakers, with tangible results. Microsoft recently announced a project to build cloud-computing data centers in Greece – a move that will upgrade Greek digital infrastructure significantly and contribute an estimated €1 billion to the local economy.

Amazon’s Web Services division also just opened its first office in Athens, testifying to the emergence of Greece as a hub for tech and digital services. Other tech giants have also seen a future in Greece: major multinationals like Samsung, Daimler, Applied Materials, Cisco, Digital Realty and Tesla – among others – have been investing in the country’s up-and-coming tech sector. 

Greece’s robust life sciences sector, already an export champion in the region, has been gaining fresh attention with the fight against COVID and is attracting significant investment in pharmaceutical research and manufacturing. Recently, pharma giant Pfizer set up an R&D hub in the northern Greek city of Thessaloniki, while roughly 15% of all Greek start-ups are in the life sciences sector. With its quality health infrastructure, more doctors per capita than any other OECD country, and a tourism brand already associated with health and wellness, Greece is an attractive destination for medical treatment and for retirees. Through a number of initiatives, the Greek government is now making an effort to tap into the European Union’s €4 trillion Silver Economy.

The Greek Green Deal, which foresees a complete phasing out of lignite by 2028 and doubling the contribution of renewable energy to the country’s energy mix by 2030, is already attracting large investments and growing exponentially. Four projects totaling 2.8 GW of wind and solar power, and worth more than €2 billion, have been approved for fast-track status this year.

International auto giant Volkswagen has just announced a pilot project to transform the Greek island of Astypalaia into the Mediterranean’s first smart, green island with electric vehicles powered exclusively by renewable energy. In the near future, Greece will introduce legislation to allow the creation of offshore wind farms, tapping the limitless wind energy of Greek seas.

These positive developments, which serve to diversify and strengthen the Greek economy, spring from targeted reforms and a new vision for Greece, as embodied in the country’s ambitious goals under the €750 billion NextGenerationEU program. A new era and the next steps Greece must take – the focus of this year’s InvestGR Forum – beckons. And if past is prologue, Greece is poised to begin a bright, new century in its modern history. 

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