Greece's 'Remarkable Turnaround' Undercut By Youth Joblessness, Frustration

The port of Parikia on the Greek island of Paros bustles with tourists shopping, dining, and catching ferries during their summer holiday. Some restaurants had a long line of people waiting to get a table.

Behind the busy vacation feeling lies another sentiment – a frustration among Greeks about their economic prospects. Waiters, taxi drivers and hotel staff repeatedly said, when asked, that Greece has become a great country to visit, not such a great place to live and prosper. 

At the Pirate’s Bar in Parikia, a waitress from Athens explained that she made more money serving €15 cocktails to customers than working as a psychologist. Like many university graduates, she hasn't been able to find a decent-paying job utilizing the degree she earned. 

Complaints heard in Athens, Mykonos and Paros raise doubts that the "remarkable turnaround" in Greece is trickling down. Greece's economy grew by 2.2% year-on-year in Q1 2025, slowing from a downwardly revised 2.5% expansion in the preceding quarter. 

Annual GDP growth rates, Greece, source: Trading Economics

"Once regarded as Europe's economic Achilles' heel, Greece is now emerging as an unlikely success story," Konstantinos Hatzidakis, vice president of Greece and a former minister of economy and finance, wrote in June for the IMF.  "This remarkable turnaround is underpinned by positive growth rates outpacing the European Union average

Hatzidakis also pointed to "a significant rebound in investment, historically high exports, and a decline in unemployment to levels unseen in over a decade."

Inflation Weighs on Consumer Spending

Greeks working in the service sector complained about the cost of living and weak wage growth. European Union-harmonised annual inflation rate in Greece accelerated to 3.7% in July 2025, the highest level since December 2023, from 3.6% in June. 

Greece had the fourth-highest inflation in the Euro area after Estonia (5.6%), Croatia and Slovakia (4.5%), and Latvia (3.9%). These smaller economies tend to rely more on imports, including energy and raw materials, and thus experience higher inflation. Euro area annual inflation is expected to be 2.0% in July 2025, according to a flash estimate from Eurostat, the EU statistical office. 

The cost-of-living situation in Greece has impacted retail sales this summer. Retail sales in Greece fell 5.6% year-on-year in May 2025 from an eleven-month high of a 7.4% gain in the previous month.

Retail sales, Greece, source: TradingEconomics

Yannis Hatzitheodosiou, president of the Athens Chamber of Commerce, told the Greek City Times that consumers have the lowest purchasing power in Europe. He warned of a bleak outlook for small and medium-sized businesses. 

"Sixty percent of SMEs are in debt today," he said. "Without significant government intervention, many will struggle to survive."

Unemployment Remains above EU Average

While GDP growth has created jobs, the country's unemployment rate has remained above the EU average.

Seasonally adjusted unemployment rate in Greece fell to 7.9% in May 2025, from a downwardly revised 8.3% in the previous month. That compares to the Euro area average of 6.3% and the broader EU average of 5.9%. 

For young Greeks, youth unemployment remains persistently high at 19.9% in May, down from 25.2% for the same period last year. Estonia, Spain, Italy, Luxembourg and Sweden had higher youth unemployment rates for the period. 

Source: Eurostat

"We do not downplay the challenges," Hatzidakis wrote for the IMF. "Inflation, while declining, remains sticky, particularly in the services sector. Productivity, though rising, remains below the EU average. The same holds true for labor market participation."

Greece Taps Tech Investments to Boost Competitiveness

To spur economic growth and create jobs, Greece has encouraged foreign investments in the country''s tech sectors. Digital Realty Trust DLR, Microsoft Corp. MSFT and the United Arab Emirates have invested in Greece.  

On Tuesday, the Athens-based energy and metals company Metlen delivered the Athens-3 (ATH3) data center to Digital Reality. The new centre was built at an old industrial site in the town of Koropi, not far from Athens International Airport. Microsoft announced plans in 2020 to upskill approximately 100,000 people in Greece in digital technologies by 2025.

Prime Minister Kyriakos Mitsotakis discussed in February investment opportunities with the United Arab Emirates' President Sheikh Mohamed bin Zayed Al Nahyan in digital technology, artificial intelligence, and data centers. 

The UAE has invested more than €4 billion, a target set in 2022, in Greece. 

Greece Wants to be the Next Start-up Nation

Mitsotakis told the French newspaper Les Echos in June that Greece was on track to becoming the next "start-up" nation. He emphasized his desire for tech start-ups to contribute 10% to the GDP in the long term.

"I also believe that—in the emerging geography of data centers and in terms of data connectivity—Greece must leverage its strategic geographic position," Mitsotakis added. "We want to become a leading force in artificial intelligence innovation within public administration."

For young Greeks working in the Aegean islands' tourism sector, the Prime Minister's ambition seems a distant reality. 

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