A warning bell for Greece’s economic journey rings out in the 2025 annual report by INE GSEE, revealing that Greek businesses’ reliance on state subsidies for investment has surged to the highest level in the European Union (EU). According to the report, in 2023, 26% of business investments stemmed from grants, primarily within the framework of the Recovery Fund. For context, Poland, second in this ranking, recorded only 15%. This finding poses a significant challenge for the sustainability of Greece’s investment capacity as the EU’s emergency Recovery Fund support ends in 2026. The lack of indigenous financial dynamics is compounded by other findings that highlight the limited self-sufficiency of Greece’s production base. In 2024, the balance of current transactions showed a deficit of 6.4% of GDP due to increased demand for imported intermediate goods. This deficit underscores the country’s production gap, identified as the core structural issue of the Greek economy. Although processing industries saw increased exports during 2019-2024, imports still far exceed exports, especially concerning medium and high-tech products. Foreign Direct Investment (FDI) inflows further complicate matters; 77.1% of FDI in 2024 went to the financial sector and real estate rather than productive sectors. Financing the public surplus and covering the external deficit in 2024 came largely from increased private debt, posing risks to financial stability amid rising interest rates. Even in areas where Greece excels, like food exports, dependency on imports of agricultural products rose between 2019 and 2022, notably in alcoholic beverages, dairy products, and vegetable oils. Full self-sufficiency exists in only four food categories, a number unchanged in recent years. This is particularly concerning given global supply chain disruptions, which emphasize the importance of domestic production of essential goods.
Greek Investments on ‘Artificial Life Support’ – Leading Europe in Dependency on State Subsidies
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