The productivity bottleneck
Public investments reached €7.6 billion in the first seven months of the year—driven largely by a more than doubling of spending from the Recovery Fund. Yet a recent report by Fitch Ratings has reignited concerns about Greece’s persistent productivity gap: output per worker remains at just 51% of the EU average. With annual Recovery Fund allocations of €4–4.5 billion set to conclude this year, disbursement speed is high—but uncertainty remains over the real, lasting impact on growth and competitiveness. While the government can tally funds disbursed, the economy will ultimately be judged by tangible improvements in productivity metrics and their effect on household incomes.
Rising costs squeeze hospitality
Tourism accommodation saw turnover rise 6.1% in Q2, reaching €3.3 billion. In stark contrast, the food service sector contracted by 2.5%. This widening gap is evident across key destinations: in Thessaloniki, accommodation revenue jumped 13.8%, while restaurants fell 7.7%; in Halkidiki, lodging grew 2% but dining dropped 7.3%; and in Achaia, restaurant turnover plunged 11.7%. Paros was the notable exception—reporting a 6.1% increase in food service activity. This marks the second consecutive quarter of divergence, signaling that visitors are increasingly tightening budgets beyond accommodation—opting for more affordable everyday consumption options amid sustained cost-of-living pressures.
Two major road projects near award ahead of Thessaloniki Fair
In anticipation of the Thessaloniki International Fair (TIF), final decisions are imminent for two strategic infrastructure projects in Northern Greece—valued collectively at around €700 million. The first is the upgrade of the EO2 highway axis (Mavrovouni–Edessa, including bypasses of Giannitsa and Chalkidona) and operation-maintenance of the Axios River Bridge–Edessa section, estimated at €444.9 million (VAT included). The second is the vertical axis connecting Drama to Amphipolis (Paleokomi), valued at €248.5 million (VAT included).
Three consortia remain in contention for both projects: GEK Terna, the Aktor Concessions–Metlen joint venture, and ABAX. Following the rejection of objections by the Unified Public Procurement Authority, financial bids are expected to be opened imminently—likely just before the TIF opens. Both contracts span 30 years: the first three to four years cover construction, with the remainder dedicated to operation and maintenance. It’s precisely this long-term operational phase—and its predictable cash flows—that makes these concessions especially attractive to groups with a proven track record in public-private partnerships.
Motor Oil’s green hydrogen plant enters final stretch
A cornerstone of Motor Oil’s 2024 investment plan—particularly in the second half of the year—is the construction of a green hydrogen production unit at Agioi Theodoroi. Backed by the Recovery Fund, the project received formal environmental approval from the Ministry of Environment and Energy yesterday—clearing the final regulatory hurdle before construction begins in earnest.