This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.

Greece’s strong recovery from the COVID crisis, supported by continued reforms, is being slowed by surging energy prices and renewed global uncertainty, despite evolving fiscal support. Fully implementing the ambitious Recovery and Resilience Plan, managing supply and cost pressures while supporting fiscal health, and completing the restoration of banks’ health are key to a sustained recovery.

Greece has rebounded from the COVID-19 crisis, through a revival of tourism and other exports, a strong investment rebound, substantial public support and implementation of the Greece 2.0 Recovery and Resilience Plan, and improving competitiveness and dynamism following a decade of reforms. Headwinds from the surge in global energy prices and Russia’s war of aggression against Ukraine have slowed this rebound. This chapter presents priorities to ensure that a sustainable recovery continues over the longer term. Achieving and maintaining modest primary budget surpluses will support debt sustainability and improve the prospects of Greece achieving an investment-grade sovereign rating. They can be achieved while supporting growth through better allocating spending and public resources, and maintaining public revenues while further broadening the tax base, improving collections and addressing distortions. More flexible work environments and wage setting, and a strong push to expand participation in quality skill training, can boost job creation and support workers’ productivity. Completing the restoration of banks’ health, while developing alternative sources of finance, will help finance new private investments. Ensuring markets are more competitive, and continuing efforts to improve the business climate, such as increasing the justice sector’s responsiveness, can further raise firms’ willingness to invest in the emerging opportunities in Greece.

A changing climate is threatening livelihoods and economic activity in Greece and the world. Transitioning to a green economy – mitigating the causes of climate change and adapting to its effects, while sustaining activity and improving well-being – is among the greatest policy challenges of the coming decades. In Greece, legacies of high emission intensity, limited fiscal space and scarce private financing amplify the challenge. Greening Greece’s energy system is at the core of this transition. This entails swiftly developing its large potential for renewable energies and adapting energy consuming sectors. A well-chosen mix of policies – including carbon pricing, public infrastructure investments, and gradually tightening regulations on minimum energy efficiency standards, while providing financial support and protecting vulnerable households – would minimise the costs of this transition. Developing insurance coverage can better protect households and firms from damages resulting from a warming climate, while limiting fiscal exposure. Engaging all stakeholders and supporting those affected by the transition will help build the consensus for implementing these policies into the long term.