ISSN 2443-8014 (online)

2023
Country
Report

Greece

INSTITUTIONAL PAPER 232 | JUNE 2023

EUROPEAN ECONOMY

Economic and
Financial Affairs

Secretariat-General
Recovery and
Resilience Task Force
European Economy Institutional Papers are important reports analysing the economic situation and
economic developments prepared by the European Commission's Directorate-General for Economic and
Financial Affairs, which serve to underpin economic policy-making by the European Commission, the Council
of the European Union and the European Parliament.

This paper has also been published as Staff Working Document SWD(2023) 608.

This specific report was prepared in cooperation with the Secretariat-General Recovery and Resilience Task
Force, with valuable contributions from Eurostat, Directorate-General for Employment, Social Affairs and
Inclusion, Directorate-General for Climate Action, Directorate-General for Environment, Directorate-General for
Regional and Urban Policy, Directorate-General for Structural Reform Support, Joint Research Centre,
Directorate-General for Energy, Directorate-General for Mobility and Transport, Directorate-General for
Internal Market, Industry, Entrepreneurship and SMEs, Directorate-General for Communications Networks,
Content and Technology, Directorate-General for Research and Innovation, Directorate-General for Education,
Youth, Sport and Culture, Directorate-General for Migration and Home Affairs, Directorate-General for Health
and Food Safety, Directorate-General for Financial Stability, Financial Services and Capital Markets Union,
Directorate-General for Taxation and Customs Union, Directorate-General for Justice and Consumers, and
Directorate-General for Translation.

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CREDIT
Cover photography: © iStock.com/Teka77
European Commission
Directorate-General for Economic and Financial Affairs
Secretariat-General
Recovery and Resilience Task Force

2023 Country Report

Greece

EUROPEAN ECONOMY Institutional Paper 232

 EUROPEAN
COMMISSION

Brussels, 24.5.2023
SWD(2023) 608 final

COMMISSION STAFF WORKING DOCUMENT

2023 Country Report - Greece

Accompanying the document

Recommendation for a COUNCIL RECOMMENDATION

on the 2023 National Reform Programme of Greece and delivering a Council opinion on
the 2023 Stability Programme of Greece

{COM(2023) 608 final}

EN EN
ECONOMIC AND EMPLOYMENT SNAPSHOT

share of impaired assets has been transferred

to credit servicers and thus remains in the
Economic growth is set to slow economy. Unemployment has been steadily
down amid a challenging global declining, and employment has fully recovered
environment from the pandemic and is above pre-pandemic
levels. Reforms and investments to increase
productivity, competitiveness, and export
The Greek economy was among the most capacity, for example those undertaken in the
severely hit by the COVID-19 crisis in the context of the recovery and resilience plan, are
EU but it recovered swiftly. After crucial in gradually reducing vulnerabilities.
contracting by 9% in 2020, Greece’s GDP grew
Greece was affected by soaring energy
by 8.4% in 2021 and by 5.9% in 2022. The
recession in Greece was deeper than in the EU prices, just like other EU Member States.
on average (-5.6%) but was followed by a Headline inflation averaged 9.3% in 2022
more dynamic recovery. This pattern is largely (Graph 1.1). For the first three quarters until its
explained by the reopening of the economy peak in September 2022, inflation was driven
after containment measures were lifted and by the surge in energy prices, which has
the strong responsiveness of the tourism started to pass through to other prices,
sector, which accounts for a sizeable share of especially of services. Headline consumer price
Greek GDP. By early 2022, Greece had inflation is set to moderate in the years ahead,
recovered the output losses it had incurred while food price inflation is set to remain more
since the end of 2019. persistent, given the lagged impact of high
energy costs on food production.
When the energy crisis hit, the recovery
slowed down. While strong growth was
recorded in the first half of 2022, rising
inflation took its toll on the economy in the
second half of the year, mainly by weakening
private consumption growth.

Greece exhibits several macroeconomic

vulnerabilities which are assessed in the
in-depth review. (1) These are linked to the
high level of public debt, a widened current
account deficit (though partly driven by the
energy crisis), a still large stock of non-
performing loans, and high unemployment
(Annex 22). However, the public debt-to-GDP
ratio fell sizeably in 2022 (and is set to fall
further). Bank exposures to non-performing
loans decreased significantly, although a large

(1) European Commission (2023), In-Depth Review for

Greece, Commission staff working document
(COM(2023) 631 final),

2
Graph 1.1: Energy and non-energy inflation, % financing remains limited, despite the progress
in recent years (see Annex 18).
14.0

12.0 Economic growth mitigated the impact of

crisis-related spending on public debt.
10.0
Greece’s public debt rose to a record high of
8.0 206.3% of GDP in 2020 and remains the
6.0 highest in the euro area, although it has a
favourable profile and repayment structure.
4.0
However, strong nominal GDP growth, driven
2.0 by both real GDP growth and inflation, helped
bring down the debt-to-GDP ratio to 171.3% in
0.0
2022.

HICP HICP excluding energy

The current account deficit continued to
increase last year, and stabilisation of
Source: Eurostat. HICP stands for the Harmonised Index the net international investment position
of Consumer Prices which is a measure of inflation. It
reflects the change over time of prices paid by
remains a challenge. The current account
households for a representative basket of goods and deficit has widened since 2020, mainly due to
services. the deteriorating balance of trade in goods
that was only partially offset by the marked
Bank profitability has increased, but improvement in the balance of trade in
challenges remain. The profitability of banks services (Graph 1.2). Despite recent
increased on the back of lower provisions for improvements, Greece’s net international
potential losses, new more profitable lending investment position stood at -141.3% of GDP
in 2022 and one-off trading gains. This has in 2022, below the EU average. Net liabilities
helped restore the banks’ capital position as of are mainly composed of public debt
end-September 2022 back to end-2021 levels, instruments held by official creditors, but the
although capital quality, albeit improving, share of private sector debt also recently rose.
remains weak. Going forward, rising interest
rates risk reducing the repayment capacity of The labour market has weathered the
debtors and put pressure on asset quality and health and energy crisis well. Since 2020,
credit demand. Rising rates also increase public support measures have helped prevent
banks’ funding costs, given that banks need to major job losses. Combined with the economic
issue long-term debt (at higher rates) to meet recovery that followed, they have led the
minimum regulatory requirements. On the employment rate to increase to a record high
positive side, the planned repayments of of 66.8% by the fourth quarter of 2022, albeit
previous longer-term funding granted by the still 8 percentage points below the EU average.
European Central Bank (2), have already Meanwhile, the unemployment rate continued
started and are likely to be completed without to decline reaching a 12-year low (11.8% by
major effects on liquidity ratios. Net lending to the end of 2022), yet remained among the
non-financial corporations picked up in 2022, highest in the EU; joblessness disproportionally
while net lending to households was still affected young people (aged 15-29) and
declining. The cost of borrowing is higher than women 24.9% and 15.6% respectively.
the average in the euro area, particularly for Nominal compensation per employee
households and small businesses, and is increased by 5.1% in 2022, which is below the
further increasing due to rising interest rates. rate of inflation, resulting in a decline in real
At the same time, business access to non-bank wages of 4.7%. The government has
announced a further increase in the minimum
wage by 9.4% as from 1 April 2023. This is
expected to partially offset the further decline
(2) Under the targeted longer-term refinancing operations
in real wages in 2023.
(TLTRO III).

3
Graph 1.2: Current account balance follows a period of energy efficiency gains for
the economy as reflected in the 21% energy
15
intensity reduction between 2012-2021.
10

5 The government took temporary

0
measures to cushion the impact of
-5
soaring energy prices. These included
subsidies to energy users, social transfers to
-10
vulnerable households, subsidies for fuels, and
-15 cuts to indirect taxes on transport services
-20 (Box 1).
-25
Greece has made progress in diversifying
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Goods Balance Services Balance
its sources of energy. In 2022, for the first
Current Account Deficit
time, renewables accounted for the largest
share in the country’s electricity production
Source: AMECO database (42%). Gas exports rose by 289% in 2022,
mainly to Bulgaria. Electricity imports
increased slightly in 2022 compared with
2021 (by 2%), with Bulgaria providing the
The economy is becoming more largest share. Greece remains committed to
energy efficient and adjusting to phasing out lignite-based electricity production
higher energy prices by 2028 and to further increasing the use of
renewable sources of energy.

In response to the energy crisis, energy

demand has fallen sharply. Since the
outbreak of the crisis, retail electricity prices
for households have been increasing but have
been kept below the EU average level, while
retail gas prices for industry have been moving
close to the EU average overall. On the
contrary, since mid-2021, retail electricity
prices for industry have been increasing to
levels that exceeded the EU average, while
retail gas prices for households have
converged to EU average levels only more
recently. Domestic gas consumption fell by
19% in 2022 and gas imports from Russia
through pipelines was more than halved. Since
Russia’s war of aggression against Ukraine,
consumption of natural gas and electricity
have been significantly reduced. Greece’s
consumption of natural gas has dropped by
22% in the period August 2022-March 2023,
compared with the average over that same
period in the last 5 years (above the 15%
reduction target), while the reduction in
electricity consumption was 11.6% (3). This

(3) For consumption of electricity, the data in the

comparison runs only until February 2023.

4
Box 1: Economic and fiscal aspects of energy measures taken
Greece has adopted several support measures to cushion the impact of energy price
inflation on households and businesses. The Commission’s 2023 Spring Economic
Forecast projects the country’s gross budgetary costs to amount to 0.9% of GDP in
2023 (4). Most measures do not preserve the price signal and do not target the most
vulnerable. Nevertheless, both gas and electricity consumption have fallen more than
the EU average in the period August 2022–January 2023. The energy support measures
are expected to be phased out by the end of 2023, depending on energy price
developments.

Specifically, the principal vehicle of support is a price subsidy on electricity consumption

to which all households and firms are eligible irrespective of their consumption or
income. Through this subsidy, which has become scaled to consumption and has an
estimated budgetary cost of 4.1% of GDP in 2022 and 0.9% of GDP in 2023, the Greek
state covers a significant part of the electricity price increase, thereby reducing the
effectiveness of price incentives to limit energy consumption. Similarly, the subsidies
given in response to high fuel prices were also not targeted as they benefited the vast
majority of households. Some more targeted income support measures have also been
adopted albeit of a smaller size. These included a temporary increase in the heating oil
subsidy, increased income transfers to low-income pensioners and vulnerable
households, and additional disbursements of child benefits.

Greece applied the EU solidarity contribution in application of Council Regulation (EU)

2022/1854 (5) at a rate of 33% for the fiscal year 2022. In addition, an extraordinary
90% levy on the windfall revenues of energy producers for the period October 2021 to
June 2022 was applied. As of July 2022, a price cap has been introduced for each type
of electricity producer. Excess revenues, i.e. the profits due to the difference between
the market price at which producers continue to sell electricity and the set price cap, are
transferred to the government and used to finance the price subsidy on electricity
consumption.

Greece managed to ensure a high level of gas supply security in 2022. Liquefied natural
gas (LNG) imports increased considerably; Revythousa was the main entry point (44%
of imports) and the US the main supplier accounting for over 50% of Greece’s total LNG
imports. Given the fact that Greece has no underground storage facilities, it procured a
floating storage unit connected to Revythousa, increasing the capacity from 225 to 375
million cubic metres. Moreover, in 2022 the Greece-Bulgaria gas interconnector was
commissioned and both countries continue working to maximise gas reverse flows.
While energy prices have decreased, uncertainty remains regarding next winter, which
requires continued efforts to structurally reduce gas demand.

(4) For 2022, the gross budgetary cost of measures

amounted to 4.8% of GDP. Some of the measures
outlined in this box were already in place in 2021.
(5) That is the application of a mandatory temporary The energy crisis increases the
solidarity contribution at a rate of at least 33% to the
extraordinary and unexpected profits of businesses urgency of addressing economic
active in the extraction of crude petroleum, natural gas,
coal, and refinery sectors. It is calculated on taxable
and social challenges
profits, as determined under national tax rules in the
fiscal year starting in 2022 and/or in 2023, which are
above a 20% increase of the average yearly taxable Greece’s investment rate remains low,
profits in 2018-2021.
although EU resources and increasing FDI

5
inflows are helping to reduce the gap exclusion and a relatively high share of the
with EU peers. Between 2010-2019, population reports unmet medical care needs
investment fell sharply, reaching 10.7% of (Annex 14).
GDP in 2019. This reflected both cyclical and
structural factors and was largely driven by a Regional disparities remain significant.
marked reduction in private investment. With more than half of its population and a
However, investment rates have been rising little less than two thirds of its economy
since 2019 to reach 13.7% of GDP in 2022, concentrated in the regions of Attica and
also because of the Recovery and Resilience Central Macedonia, Greece features a rather
Facility (RRF), other EU funds, and increasing disparate economic development model. The
FDI inflows, thereby reducing Greece’s large disparities in GDP per capita are notably
investment gap relative to the EU average due to cross-region inequalities in innovation
from 11.5% of GDP in 2019 to 8.7% of GDP in performance, digital integration and skills (see
2022. Annexes 11, 15, 17).

Labour productivity falls short of the EU With support from EU funds, the country
average and the gap has widened in the is gradually moving towards a more
last decade. R&I expenditure by businesses sustainable development model. Greece is
was below the EU average in 2022. Real improving on almost all United Nations
productivity per hour worked remained below Sustainable Development Goals (SDGs) related
2010 levels, largely due to slow productivity to environmental sustainability, although it
growth in the last 12 years in key sectors, such needs to catch up with the EU average. Albeit
as services and construction. Productivity starting from a relatively low position, over the
levels in the manufacturing sector are in line last 5 years Greece has brought the use of
with the EU average, but the share of industry renewable energy sources to the EU average,
in the economy has been on a declining trend and it significantly reduced greenhouse gas
for many years. Meanwhile, there has been a emissions. Nonetheless, access to affordable
steady decline in real unit labour costs during and green energy remains challenging with
the last decade, as the decline in wages more 17.5% of its population being unable to keep
than offset the weak productivity their home adequately warm (2021 data).
performance. Regulatory restrictions in the Greece also fares better than in the past in
access to and exercise of certain business several dimensions of fairness, productivity
services are higher than in the EU on average, and macroeconomic stability. Nevertheless,
resulting in lower competition, higher average there is room for further improvement,
costs and hence lower competitiveness (Annex including to tackle unemployment, inequalities
12). Looking ahead, ensuring competitiveness and poverty, especially in rural areas (see
by fostering labour productivity remains key. Annex 1). EU funds such as the Recovery and
Resilience Facility and the cohesion policy
While living and working conditions, as funds provide key support to Greece’s efforts
reflected in the European Pillar of Social to meet its SDGs (Annex 3, 4) and its 2030
Rights, are better overall than 5 years national targets on employment, skills, and
ago, significant social challenges remain. poverty reduction (Annex 5, 14).
While the share of children that leave school
early is among the lowest in the EU, access to
the labour market and further upskilling
opportunities remains difficult. Unemployment
is gradually decreasing, but there remains a
high share of young people not in
employment, education or training. Also, only
around half of women are employed as
opposed to more than 70% of men, one of the
largest employment gaps in the EU. Nearly one
third of children are at risk of poverty or social

6
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY

Greece’s recovery and resilience plan (RRP) Greece has not yet submitted an
aims to address the key challenges related to amendment of its plan. The plan is
the green and digital transitions, employment, expected to be revised in 2023 to include,
skills and social cohesion, private investment, among others, additional reforms and
and economic and institutional transformation. investments in the REPowerEU chapter.
It consists of 68 reforms and 106 investments However, discussions with Greece on the
that are supported by EUR 17.4 billion in REPowerEU chapter are still at an initial stage.
grants and EUR 12.7 billion in loans (in 2018 In March 2023, Greece communicated to the
constant prices), representing 14.5% of GDP in Commission its intention to request an
2022 (see Annex 3 for more details). additional loan of EUR 5 billion, with the aim
to bring its total loan envelope to EUR 17.7
The implementation of Greece’s recovery billion. Going forward, it would be important
and resilience plan has so far been well for Greece to swiftly finalise the addendum to
underway, however it is facing some the plan, including the additional loan request,
challenges going forward. Greece and the REPowerEU chapter with a view to
submitted 3 payment requests for non- rapidly starting its implementation.
repayable financial support (6) and 2 payment
requests for loan support, corresponding to 85 The following, more detailed review of
milestones and targets in the plan. To date, measures being implemented under the RRP in
Greece has received an overall disbursement no way implies formal Commission approval or
of EUR 7.1 billion for two approved payment rejection of any payment requests.
requests, excluding pre-financing. (see Annex
3). Whilst Greece is off to a strong start, there
are substantial risks going forward, which
warrant continuous efforts to maintain and Investments and reforms to support the
enhance the implementation momentum. The green transition are making progress.
plan contains a significant number of reforms Greece launched calls for the renovation of
and investments which by its sheer size more than 100 000 residential properties to
represents a large administrative burden. At improve energy efficiency, with some funds
this stage, the implementation of the plan is earmarked for energy-poor households. This
reaching a phase that will rely on regional and investment is expected to yield significant
local administrations, whose administrative primary energy savings (on average 30%). To
and implementation capacity is generally increase the share of renewables in the energy
weak. The completion of a number of mix, Greece introduced a new framework for
measures in the plan requires a series of the licensing of renewables, including offshore
preparatory steps, including public wind parks and a new support scheme for
procurement procedures. Ensuring timely renewable energy production (7). Moreover,
progress with those will require continuous Greece introduced a ‘Guarantee of Origin’
strong coordination of and assistance to local system, encouraging consumers and
and regional implementing bodies. businesses to use energy from renewable
sources in their energy mix. In addition, Greece

(6) Greece submitted its third payment request for non- (7) The latter is expected to add an additional 3 gigawatts
repayable financial support on 16 May 2023 and the to the electricity production capacity from renewable
assessment by the Commission is ongoing. energy sources.

7
introduced a new waste management Greece has reformed labour legislation,
framework to support the transition towards a upgraded its lifelong learning system and
circular economy. A framework contract law modernised public employment services.
will enable the land rehabilitation of Greece’s The labour law of June 2021 modernised
former lignite mines in Western Macedonia individual and collective labour legislation as
and Megalopolis, building on its national well as the framework for work-life balance. It
energy and climate plan. The Just Transition was followed by a thorough organisational
Fund will follow up with the repurposing of the reform of the public employment service, a
land upon its rehabilitation. revision of the obligations that apply to the
service and to jobseekers, and a reform of the
To promote sustainable transport, key national lifelong learning system to improve
reforms were put in place paving the way the quality and labour market relevance of
for investments in railways, urban public training programmes. The latter reform also
bus transport and electromobility. Greece sets the basis for delivering training
adopted legislation for the reorganisation of programmes, including on highly demanded
the companies owning and managing the digital and green skills, to more than half a
railway infrastructure. Once fully implemented, million people until 2025. With support from
the reform is expected to help Greece develop, the RRF, Greece has also embarked on the
operate and maintain a modern and safe digital transformation of employment and
railway network. Greece also adopted a social security services and it has introduced a
modern legal framework for public bus personal assistance pilot scheme for people
transport services, aimed at promoting with disabilities that applies a new disability
competition, enabling bus companies to invest assessment approach in line with EU best
in greener vehicles, and increasing the quality practices.
and affordability of consumer services. Lastly,
Greece adopted a comprehensive regulatory Greece completed key reforms to
framework to promote the installation and stimulate private investment, particularly
operation of charging stations for electric related to the green and digital
vehicles across Greece, putting the country on transitions, and to bolster the
a path to reach the target of 30% electric competitiveness of its economy. A law was
vehicle usage by 2030. adopted to tackle weaknesses related to the
predominantly small size of Greek enterprises.
Greece has launched projects to digitalise Specifically, the law introduced tax and other
the public administration and the broader incentives to encourage the self-employed and
economy. Greece began to digitalise its public SMEs to increase their size and to benefit from
administration, making it more efficient and economies of scale through business
accessible for citizens. This includes the transformations and cooperation schemes,
digitalisation of archives, the development of such as joint ventures and clusters. Greece
IT and IT security infrastructure, and the also introduced tax incentives for green and
simplification of administrative processes. digital investments by SMEs. Lastly, a
Greece has also launched a scheme to support comprehensive, clear and more attractive legal
SME adoption of digital technologies. Upon framework was put in place for investments of
completion, the project is expected to help at strategic importance to the Greek economy.
least 100 000 SMEs in purchasing general This includes support for the transition to a
digital tools and services and at least 500 000 low-carbon economy and promoting
SMEs in upgrading their cash registers to innovation and technology diffusion.
computer-based solutions. Greece also
launched a training programme for judges to Greece pursued specific reforms and
improve their digital skills relevant for judicial investments to strengthen the resilience
duties. of key sectors of its economy. It launched
subsidy schemes to promote the development
To improve the functioning of the labour of next generation industrial parks and the
market and promote social integration, deployment of smart technologies in

8
manufacturing sector SMEs. Greece also
launched a support programme to modernise
its agricultural sector through innovation, the
green transition of agricultural units, and the
development of agritourism. Furthermore, an
improved regulatory framework is in place for
the licensing and operation of tourism
facilities, including tourist ports, which is
expected to contribute to the development of
the tourism sector, which is an area of great
potential for Greece. To promote research and
development, Greece launched the procedures
for the creation, expansion and upgrade of
infrastructures of research centres and
technological institutions across Greece.

To improve access to finance and support

private investments, in particular in the
green and digital areas, Greece has
enacted the loan facility under the RRF.
The loan facility (8) facilitates access to
affordable credit for Greek businesses amidst
heightened economic uncertainty and it aims
to leverage private investment.

(8) The loan facility framework concerns the provision of

loans through international financial institutions and
commercial banks (EUR 11.7 billion), the establishment
of an equity instrument to provide equity support to
dynamic mid-caps and SMEs through two Fund-of-
Funds schemes (EUR 500 million), and the mobilisation
of additional funds for Greece’s part of the InvestEU
Programme, through the provision of guarantees to
companies in the areas of green and sustainable
transformation, competitiveness, innovation and
digitalisation (EUR 500 million).

9
 Box 2: Key deliverables under the RRP in 2023-24
 Completion of renovations of at least 8 000 residential buildings to improve their
energy efficiency, and approval of at least 9 700 companies for energy efficiency
renovations.
 Start of the projects to promote resilience and environmental protection of the
electricity network, overhead networks in forest areas, and capacity increases of high-
and medium-voltage substations.
 Implementation of organisational reform in the rail sector and full operationalisation of
the new Hellenic Railway Organisation (OSE) and its construction manager (ERGOSE),
and full deployment of the European Rail Traffic Management System (ERTMS) in the
core railway network.
 Completion of digitisation of at least 30% of total archives across all 9 subprojects in
the public administration.
 Adoption of primary legislation establishing the rewarding system in the public
administration.
 Adoption of legislation providing for professional work streams for staff dealing with
public procurement.
 Simplification and codification of tax legislation, and launching of an IT platform to fully
automate VAT refunds.
 Modernisation of justice, through upskilling of judges, upgrading of the record-keeping
and IT systems in courts, adoption of legislation to monitor and improve the
performance of judicial clerks, and starting the construction and renovation of energy-
efficient court buildings. Revision of the judicial map for all branches of the judiciary,
for the reorganization of judicial districts across Greece and the rational distribution of
judicial structures in these districts, with at least 70% of administrative courts, and at
least 40% of civil and criminal courts fully operational and functional.
 Modernisation and digitalisation of the public health sector, including through starting
the project for the energy-efficiency renovation of at least 156 health centres, the full
operation of an additional 56 mental health units, and completing the national digital
health record and cancer digital health projects.
 Completion of digital and green upskilling programmes for nearly 150 000 people.
 Advancing on the de-institutionalisation of children, notably through the placement of
minors with severe disability and/or mental disorders in the care of professional foster
carers and the placement of adolescents in semi-independent living apartments.
 Signing of loan agreements for a total EUR 5.9 billion under the loan facility.

Specifically, it supports investments related to investments in clean and efficient production

the green transition and digitalisation (37% and use of energy, sustainable transport, very
and 20% of the total allocation), thereby high-capacity networks, and digitalisation of
encouraging economies of scale and enterprises.
innovation and increasing export capacity. To
this end, the Greek authorities took all the
necessary actions to fully establish the loan
facility framework. So far, the take-up of RRF-
financed loans has been significant. Namely,
loan agreements for a total EUR 5.74 billion
have been signed up to April 2023 to finance

10
FURTHER PRIORITIES AHEAD

Greece faces challenges beyond those productivity (SDGs 4, 8, 9) and macroeconomic

tackled in the recovery and resilience stability (SDGs 8, 16, 17).
plan. Despite the sharp fall last year, public
sector indebtedness remains high and taxation
of businesses remains complex, while there is Sustainability of public finances
evidence of low tax compliance, particularly
among the self-employed. The public sector remains a priority
wage bill in terms of GDP has been broadly
aligned with the EU average and Greece
continues to take steps to modernise the High public sector debt calls for prudent
public administration. Still, its overall fiscal policies in the medium term. In
performance remains low, partly due to the 2022, government debt fell sharply relative to
challenge of attracting and maintaining high- GDP (from 194.6% of GDP in 2021 to 171.3%
calibre staff. The healthcare sector is in 2022), while it is forecast to drop further to
characterised by high direct payments for 160.2% in 2023. Government debt is primarily
services outside the benefits package and the held by official sector creditors on
primary healthcare system does not concessional terms and the financing needs of
sufficiently fulfil its role as the first entry point the public sector are expected to be
into the system for patients. Despite a series manageable in the coming years. Meanwhile,
of adopted reforms and progress in certain the Commission’s debt sustainability
aspects of the business environment, doing analysis (9) indicates that risks to debt
business remains hampered by constraints on sustainability are low in the short term, high in
access to finance and public administration the medium term and low in the long term.
inefficiencies. The cadastral mapping remains
to be finalised. While the share of non- Modifications in Greece’s tax policy
performing loans in bank balance sheets has framework and continuing efforts to
decreased markedly, the effective workout of strengthen tax administration could help
both new and legacy non-performing loans by address the investment gap and enforce
banks and credit servicers remains key for the tax compliance. The introduction of an
resilience of the financial sector. Providing advance tax ruling system could strengthen
effective activation support to the unemployed legal certainty for investors and reinforce
depends on administrative capacity ongoing efforts to simplify the tax system.
constraints. Greece remains highly dependent There is also scope to enlarge the tax base
on fossil fuels and existing storage and and enforce tax compliance of the self-
network capacities are not enough to enable employed. Data suggest that the turnover
the smooth integration of expanding generated by the self-employed has increased
renewables in the coming years. Energy rapidly, while their declared incomes have
efficiency actions should be strengthened to hardly risen (10). This discrepancy is likely to
ensure that set objectives are met, including point to substantial tax evasion and a loss of
the swift roll-out of smart meters. Addressing
these challenges will also help to make further
progress in achieving the SDGs where Greece (9) Post programme surveillance report, Greece, May 2023.
currently shows room for further (10) Based on the 2021 tax returns, more than 67% of the
improvement, namely those related to self-employed declared an annual income of below
EUR 10 000. Overall declared income was EUR 4.2
environmental sustainability (SDGs 2, 6, 7, 9,
billion, compared with EUR 48.6 billion of sales turnover.
11, 12, 13, 15), fairness (SDGs 1, 3, 4, 5, 7)

11
fiscal revenues. The situation could be 27% respectively), while spending on long-
improved by reviewing the existing tax system term and preventive care remains among the
of the self-employed and making increased lowest in the EU (0.1% and 0.2% of GDP in
use of the information from electronic 2020 vs 1.5% and 0.3% in the EU
payments. This is consistent with the ongoing respectively). Also, no comprehensive national
digitalisation of the Independent Authority for strategy on long-term care is yet in place.
Public Revenue (IAPR), which continues to roll Hospitals are the main providers of curative
out new digital tools and services to citizens care, while ambulatory care receives only little
and businesses. Enhancing IAPR’s autonomy to public funding. At the same time, public
manage and develop its human resources and spending on pharmaceuticals is the highest in
IT infrastructure will also be key for the the EU relative to GDP (1.6% in 2020 vs 1.1%
successful implementation of ongoing in the EU).
investments under Greece’s recovery and
resilience plan, such as the replacement of its The primary healthcare reform is
core tax information system. expected to ensure full and equal access
to healthcare but it suffers from a
Improving the efficiency of the public shortfall in doctors. The newly adopted
administration remains key. The public primary healthcare system provides incentives
wage bill remained stable in 2022 at 10.8% of for patients to use their family doctors as the
GDP, broadly aligned with the EU average first point of contact to help them navigate
(10.2% of GDP) (11). Greece is phasing in its through the healthcare system. In July 2022,
human resource management system, citizens started to register in the new system
including goal-setting, with the aim to ensure and 4.8 million citizens had registered to a
an efficient allocation of resources and to family doctor (55% of the total eligible
provide incentives to maintain a high-quality population) by end-April 2023. By contrast, the
workforce. Going forward, possible number of family doctors enrolled in the public
adjustments made to the remuneration of civil healthcare system is not sufficient to cover
servants, for example by incentivising the entire population (12). The goal is to reach a
managers to take up additional responsibilities number of doctors that covers the entire
linked to the new appraisals and reward population by September 2023. This calls for
systems, is expected to maintain the integrity additional measures to strengthen existing
of the unified wage grid across the public incentives to create the basis for
administration. In addition, despite some comprehensive primary healthcare, such as
progress on improving good law-making limiting reimbursement of services and
procedures, timely and genuine stakeholder prescriptions by general practitioners and
consultation prior to new legislative initiatives internists not enrolled in the system.
remains suboptimal.

Public spending on healthcare is below

the EU average and major expenditure is A sound financial sector is crucial
on pharmaceuticals. Public healthcare for promoting economic growth
spending reached 5.9% of GDP in 2020 which
compares with an EU average of 8.9% of GDP.
However, out-of-pocket payments by patients The stock of non-performing loans fell
in Greece (as a share of GDP) are the second markedly, making use of securitisations.
highest in the EU. Spending on curative care The non-performing loan ratio (13) has
and pharmaceuticals represents the biggest
share of public healthcare spending (59% and
(12) So far, about 3 400 general practitioners and internists
have registered as personal doctors which covers only
72% of the population with an unequal geographical
(11) Greece’s wage bill amounted to EUR 22.73 billion in coverage across the country.
2022 (compared with EUR 22.52 billion in 2021),
accounting for 19.9% of public expenditure. (13) Non-performing loans (NPLs) as a share of total gross
loans as reported by the European Central Bank. This

12
continued to fall, reaching 6.4% of total loans debt enforcement, including through a more
in September 2022, down from 8.6% in 2021, streamlined and effective post-auction process
and 26.5% in 2020. Nevertheless, it remains and a speed-up of cadastre registration
the highest in the EU, where the average is procedures. The Supreme Court plenary
1.8%. State-supported securitisations under decision published on 16 February 2023
the Hercules Scheme (expired in October acknowledged the legal standing of credit
2022) were a key driver behind the sharp servicers to initiate enforcement proceedings
reduction in the stock of non-performing loans. also under the 2003 securitization law (14).
This decision creates a precedent resolving the
The effective workout of both legacy and previous legal uncertainty, averting a standstill
new non-performing loans by banks and in debt enforcement and facilitating amicable
credit servicers remains key for the restructuring solutions with debtors. Additional
resilience of the financial sector. Going tools, such as the new insolvency code and its
forward, bank in-house management of loans out-of-court workout framework, are already
is expected to be the main driver in reducing bringing in first results. These mechanisms are
non-performing loans closer to the EU expected to help debtors, banks and credit
average. At the same time, a large amount of servicers in tackling the accumulation of
legacy non-performing private debt, which private debt through more effective
exited bank balance sheets, remains in the restructuring solutions.
economy and is held by credit servicers (see
Graph 3.1), who are expected also to proceed
with its resolution and restructuring. A number Improving the business
of these securitised portfolios have been
underperforming their initial objectives, mainly environment is crucial to boost
due to lower recoveries from collateral productivity and competitiveness
liquidations. This is partly the result of the
suspension of enforcement proceedings and
delays in court procedures during the COVID- Fostering external sector sustainability
19 pandemic, but it also reflects the still high through competitiveness gains remains
ratio of unsuccessful auctions, despite the key. The energy crisis and the increased
increase in conducted auctions in 2022. Credit import bill have led to a widening external
servicers are taking targeted actions to trade deficit, notably in goods, and have
gradually meet their initial objectives. These widened the deficit in the net foreign
include sales of non-performing loan portfolios investment position. At the same time, efforts
on the secondary market, enabling credit to attract foreign direct investment have
servicers to frontload cash flows, albeit at a started to bear fruit but the stock remains low.
potential cost to future performance. To In 2022, inflows stood below the EU average
effectively improve performance and improve at 3.2% of GDP, albeit sectors with
the sale value of the underlying portfolios, productivity growth potential, such as
such transactions would need for example to manufacturing and energy, have seen higher
increasingly involve loans that have undergone rates. Cost competitiveness has been
restructuring and have become performing improving over the adjustment programme
again. years, and exports have increased and
diversified. Unit labour costs slightly
An efficient debt enforcement process rebounded in 2020 and 2021, but dropped
remains crucial for a smooth functioning below 2015 levels in 2022. At the same time,
of the non-performing loan secondary Greece’s comparative advantage is
market. This may require further improving concentrated in products with low

figure is different to the one reported under post-

programme surveillance, which follows NPLs as a share (14) This is in addition to the proceeding being initiated
of total gross customer loans on a solo basis, as under the 2015 law on the licensing and regulation of
reported by the Bank of Greece. non-bank service providers and loan transfers.

13
technological sophistication, although it has extensive delays in some cases, which affect
been exporting increasing volumes of high- negatively property transactions and auctions.
tech goods more recently. Efforts to enhance Meanwhile, the forest mapping for the entire
competitiveness through productivity gains as country has been completed.
opposed to cost reduction remain essential to
ensure external sector sustainability. Slow environmental licensing and the
lack of spatial plans impede investment.
Despite a series of adopted reforms and Despite reforms to expedite the issuance and
progress in certain respects, the business renewal of environmental permits,
environment is still weighing down on administrative deadlines are often not
competitiveness. In 2020, Greece introduced respected in practice, partly due to capacity
a new insolvency framework which entered constraints. Furthermore, the relevant registry
into force in 2021, and reformed the for the certification of private sector
requirements for the licensing of economic environmental assessors (16) is not yet
activities. Greece has also adopted a new law activated. The still incomplete legislative
and a national strategy to improve public framework for the protection of Natura 2000
procurement. A legislative reform has helped areas (17) poses significant risks to Greece’s
liberalise business services and other rich natural ecosystem, and it also stifles
regulated professions and activities. However, economic activity. Specifically, the issuance of
limited access to finance remains a key barrier implementing acts (18) for the protection and
to private investment and restrictions to enter management of environmentally sensitive
certain key professional services, such as legal areas would provide legal certainty for the
services, appear to be higher than the EU types of permissible investments in 30% of
average, weighing on competitiveness. Greece’s territory, but this is now missing. In
According to the latest Single Market addition, it is important to complete the
Scoreboard (15), Greece performs relatively special spatial frameworks for renewables,
poorly in terms of correct transposition of EU industry, tourism and aquaculture, as these
directives into national law, the impact of acts would ensure effective environmental
regulation on investment, and the time needed permitting.
to resolve insolvency cases (3.5 years,
compared with an average of 2 years in the
EU). More systematic provision of consolidated
Getting more people to work
legislation would also enable businesses to
comply with regulatory requirements (see remains key
Annex 12).

The cadastral mapping is expected to be While the labour market has so far
completed by the end of this year. So far, weathered the health and energy crisis
72% of property rights in the country have well overall, it remains marked by high
been mapped. In total, 99.2% of the country’s unemployment. Net job creation has
mapping is either completed or contracted and continued since the end of 2019 bringing total
under implementation, with the full mapping employment to 4.1 million people (and the
planned to be completed by end-2023. The employment rate to 66.8%) by the end of
392 old mortgage offices are progressively 2022. The unemployment rate (15-74 age
being closed and replaced by 17 cadastral cohort) has continued to fall and reached a
offices and 75 branches with digitalised twelve-year low of 11.4% by February 2023,
procedures. At this stage, 12 cadastral offices 5.6 percentage points below its pre-pandemic
and 49 branches are in operation. However,
the registration of property rights in the (16) As per Law 4014/2011, Presidential Decree 50/2021
mortgage and cadastral offices is showing and Joint Ministerial Decision 17185/2022.
(17) As per Law 4685/2020.
(15) https://single-market-scoreboard.ec.europa.eu/home_en (18) Presidential Decrees or Joint Ministerial Decisions.

14
level. This is partly thanks to the introduction the service achieve even better outcomes in
of the short-time work scheme supported by job matching.
SURE (19) that helped prevent large lay-offs.
Nevertheless, the unemployment rate remains
more than 6 percentage points above the EU
average and it disproportionally affects Reducing fossil fuel dependency
women, young people and third-country requires accelerating the green
nationals who also face higher poverty risks. In transition
2021, the share of people at risk of poverty or
social exclusion (AROPE) (based on incomes of
2020) stood at 28.3%, well above the EU Greece remains highly dependent on
average of 21.7%, and even higher for fossil fuels and further efforts are
children (32%). required to step up the energy transition.
Fossil fuels still account for a major part of
Providing effective activation support to Greece’s energy mix, with oil covering 52%
jobseekers with a particular focus on and gas reaching 24% in 2021 (see figures in
vulnerable groups remains a challenge. Annex 7). There is scope to further decarbonise
Through its 118 local offices, the public the transport sector, in particular through
employment service has to serve around 1 further investments in sustainable mobility.
million jobseekers, of which two thirds are While Greece has made some progress in
women and 12% are third-country nationals. encouraging the uptake of electric vehicles, the
During the last 2 years, the service went availability of publicly accessible charging
through a major organisational reform; this points is one of the lowest in the EU (20). The
included shifting administrative staff towards REPowerEU Initiative provides a unique
counselling functions, establishing group opportunity to scale up and support energy-
counselling services and intensifying related measures to further enhance Greece’s
cooperation with employers. The service decarbonisation objectives. Reducing the
further revised the framework of mutual country’s overall reliance on fossil fuels is an
obligations it has with jobseekers, while essential part of ensuring security of supply.
putting in place financial incentives for the
latter to take up work. Nonetheless, the service Further investments in storage and
continues to face human resource constraints network capacity will be needed to
(with each employment counsellor serving safeguard the grid’s balance, as more
more than 2 000 jobseekers) and heavy renewables will be integrated. With new
administrative procedures, depite the fact that renewable energy source (RES) installations in
many of them have been digitalised in recent the pipeline, which would double the current
years. Between 2021 and 2027, the European RES capacity, there remains a need to continue
Social Fund Plus and the Recovery and expanding the grid, including interconnections
Resilience Facility will facilitate the (e.g. Euro-Asia). Increasing Greece’s storage
recruitment of 540 employment counsellors capacity is a priority, including the introduction
on a temporary basis, increase the supply of of common remuneration schemes for stand-
activation and training programmes for alone storage facilities and behind-the-meter
jobseekers, and expand the use of IT tools. storage systems, which could contribute to
Beyond these measures, more structured addressing challenges linked to the high
actions, including intensifying the volatility of renewable energy sources. Recent
individualised assessment of jobseeker skills initiatives to expand their use include self-
needs, and further streamlining administrative consumption schemes (e.g. photovoltaic
and staff management procedures, could help system on rooftops with a battery), while a

(19) Council Regulation (EU) 2020/672 of 19 May 2020 on

the establishment of a European instrument for (20) https://theicct.org/wp-content/uploads/2023/01/ICCT-
temporary support to mitigate unemployment risks in European-Vehicle-Market-Statistics-
an emergency (SURE) following the COVID-19 outbreak. Pocketbook_2022_23.pdf.

15
recently adopted legal framework aims to electrified. This makes it well-placed to expand
promote energy communities; however, steps its renewable energy consumption, including
to bring further clarity and incentives are use of renewable hydrogen, if there is secure
needed. In 2022, Greece adopted a legal supply at affordable prices. Targeted financial
framework for the development of offshore support, complemented by a regulatory
wind farms with key elements, such as the framework that promotes power purchase
allocation of specific slots, expected to be in agreements, notably for renewable energy
place soon. While the potential for offshore production, could speed up the industry’s
wind is significant for Greece, the lead times efforts to decarbonise. Greece’s plans to put in
are typically long. This means that the further place a legal framework to promote the
development of onshore wind capacity to development of a market for renewable
complement solar power will remain hydrogen and biomethane production could
important. As concerns speeding up the also contribute to this goal.
installation of new renewable energy sources,
it will be important to fully enforce the new Accelerating the green energy transition
legal framework adopted in 2022, which depends on the availability of
provides that the required licences for appropriate skills, including to promote
renewable energy sources and storage innovation. During the period 2015-2021, the
projects can be in place within 14 months. job vacancy rate increased in construction,
(from 0.2% in 2015 to 4.3% in 2021, above
Continued efforts are needed for Greece the EU average of 3.6%) pointing to possible
to achieve its 2030 energy efficiency labour shortages in a sector that is highly
targets. Greece is making progress, for relevant for the green transition (21). In 2022,
example, through the successful renovation labour shortages were reported in three
programme ‘Exoikonomo’ (Annex 6), towards occupations that required skills and knowledge
its target of keeping annual primary and final relevant for the green transition, including
energy consumption below 20.6 Mtoe and plumbers, pipe fitters, and building and related
16.5 Mtoe, respectively, by 2030, as set out in electricians (22). Also in 2022, labour shortages
its national energy and climate plan. However, were reported as a factor constraining
considering Greece’s old building stock, more production in a large proportion of firms in
energy savings could be unlocked with further construction and manufacturing (43.9% and
renovation efforts. The introduction of new 8.8% respectively) (23). Upskilling and reskilling
financial instruments (e.g. energy efficiency for the green transition and net-zero industry,
auctions) and the development of the energy including for people most affected, and
services market could expand the coverage of promoting inclusive labour markets are
existing support programmes and leave more essential to ensure a fair transition to a net-
space for public funds to target energy-poor zero economy (see Annex 8). Furthermore, the
households and to extend the scope to cover acceleration in innovation and R&D remains a
public and commercial buildings. Greece’s pivotal factor in fostering the development
share of smart meters, which enable and deployment of breakthrough clean energy
consumers to actively participate in the market technologies.
and support demand-side response, is well
below the EU average (3% compared with
54%, 2021 figures). In addition, specific
(21) Eurostat (JVS_A_RATE_R2).
sectors, such as the transport and water
sectors, have significant scope for energy (22) Data on shortages is based on European Labour
Authority (2023), EURES Report on labour shortages
savings. and surpluses 2022. Skills and knowledge requirements
are based on the ESCO (European Skills Competences
There is room to increase the use of and Occupations) taxonomy of skills for the green
renewable energies in industry to transition (for occupations at ISCO 4-digit level of which
there are 436 in total). Examples are identified based
accelerate efforts towards net-zero. on their ESCO ‘greenness’ score and relevant sectors.
Compared with most other Member States,
(23) European Business and Consumer Survey.
Greece’s industry is, to a large degree,

16
Greece is facing more frequent and
intense natural hazards than other EU
countries. The country appears to be
particularly vulnerable to floods. Between
1980 and 2020, only around 15% (24) of
disaster losses were insured in Greece. The
current protection gap for wildfires and
earthquakes suggests that the insurance
coverage (25) remains low compared to
projected risk, and this could result in losses to
be covered by the public sector, potentially
posing a risk to public finances.

(24) Disaster Risk Financing: Limiting the Fiscal Cost of

Climate-Related Disasters (Radu, 2022).
(25) The climate protection gap refers to the share of non-
insured economic losses caused by climate-related
disasters. This indicator is based on the modelling of the
current risk from floods, wildfires, and windstorms as
well as earthquakes, and the estimation of the current
insurance penetration. The indicator does not provide
information on the split private/public cost of climate
related disasters. A score of 0 means no protection gap,
while a score of 4 corresponds to a very high gap.
EIOPA considers that a score below 3 is not a relevant
protection gap but that countries with a score of 2.5
need to be monitored (EIOPA, 2022).

17
KEY FINDINGS

Greece’s recovery and resilience plan resilience plan, and swiftly finalise the
includes measures to address a series of REPowerEU chapter with a view to rapidly
structural challenges through the starting its implementation. Continued
following: sufficient administrative capacity should be
ensured in view of the size of the plan.
 Upgrading the energy efficiency
performance of public and private buildings Beyond the reforms and investments in
with the aim to address energy poverty and the RRP, Greece would benefit from the
achieve energy savings. following.

 Supporting the phasing out of lignite-based  Enlarging the tax base and strengthening
power generation, the use of renewable tax compliance, including by introducing a
energy sources, and the expansion of comprehensive advance tax ruling system,
energy storage capacities. considering the use of information from
electronic payments to review the taxation
 Promoting sustainable transport, and of the self-employed, and enhancing the
sustainable waste and water management, autonomy of the tax administration
through comprehensive reforms and authority.
investments.
 Safeguarding the efficiency of the public
 Facilitating the digital transformation of administration by ensuring it can attract
public administration and private sector the right skills, while maintaining its human
companies, including SMEs, and expanding resource costs at pre-pandemic levels.
connectivity infrastructure and digital skills.
 Enhancing the efficiency of healthcare and
 Upgrading public administration, tax long-term care spending, including by
administration and justice systems. completing the roll-out of the primary
healthcare system with sufficient staffing
 Fostering labour market activation and to ensure full population coverage, and by
upskilling and supporting the social developing a comprehensive strategy for
integration of vulnerable groups by means long-term care.
of employment and training opportunities.
 Accelerating the reduction of non-
 Modernising the entire education system performing loans held by banks and credit
and expanding the supply of early services, including by increasing the
childhood education and care. effectiveness of debt enforcement,
improving the functioning of the non-
 Upgrading the national healthcare system. performing loan secondary market and by
implementing all the available tools under
 Providing favourable finance and tax the new insolvency code.
incentives to private sector companies to
undertake green and digital investments  Further improving the business
and help them grow. environment by completing the cadastre
project, expediting environmental
Greece should maintain the momentum in the permitting procedures, completing special
steady implementation of the recovery and spatial frameworks in key sectors, and

18
 ensuring the effective application of
environmental legislation.

 Ensuring effective labour market activation

support with a particular focus on young
people and women, and further enhancing
social policies, so as to contribute to the
2030 EU headline targets on employment
and poverty reduction.

 Reducing dependence on fossil fuels by: a)

reducing overall fossil fuel use and further
expanding the deployment of renewable
energy, including development of hydrogen
infrastructure and offshore wind, thereby
supporting the decarbonisation of the
Greek economy and reaching national
targets; b) ensuring sufficient capacity of
electricity networks and storage and
continuing to diversify energy supply
routes; and c) strengthening the energy
services market framework and stepping up
delivery on measures to improve energy
efficiency, including better targeting of
vulnerable households and specific sectors
(e.g. water) and speeding up the roll-out of
smart meters.

 Promoting skills needed for the green

transition.

19
ANNEXES
LIST OF ANNEXES

Cross-cutting indicators 26

A1. Sustainable Development Goals 26

A2. Progress in the implementation of country-specific recommendations 28

A3. Recovery and resilience plan - overview 31

A4. Other EU instruments for recovery and growth 34

A5. Resilience 37

Environmental sustainability 38

A6. European Green Deal 38

A7. Energy security and affordability 43

A8. Fair transition to climate neutrality 48

Productivity 51

A9. Resource productivity, efficiency and circularity 51

A10. Digital transformation 53

A11. Innovation 55

A12. Industry and single market 57

A13. Public administration 60

Fairness 63

A14. Employment, skills and social policy challenges in light of the European Pillar of Social Rights 63

A15. Education and training 65

A16. Health and health systems 67

A17. Economic and social performance at regional level 69

Macroeconomic stability 71

A18. Key financial sector developments 71

A19. Taxation 74

A20. Table with economic and financial indicators 76

A21. Debt sustainability analysis 77

A22. Macroeconomic imbalance procedure assessment matrix 80

23
LIST OF TABLES
A2.1. Summary table on 2019-2022 CSRs 28
A3.1. Key elements of the Greek RRP('s) 31
A5.1. Resilience indices summarising the situation across RDB dimensions and areas 37
A6.1. Indicators tracking progress on the European Green Deal from a macroeconomic perspective 38
A7.1. Selected indicators on energy mix 43
A8.1. Key indicators for a fair transition in Greece 49
A9.1. Overall and systemic indicators on circularity 52
A10.1. Key Digital Decade targets monitored by DESI indicators 54
A11.1. Key innovation indicators 56
A12.1. Industry and the Single Market 57
A13.1. Public administration indicators 62
A14.1. Social Scoreboard for Greece 63
A14.2. Situation of Greece on 2030 employment, skills and poverty reduction targets 64
A15.1. EU-level targets and other contextual indicators under the European Education Area strategic framework 66
A16.1. Key health indicators 68
A17.1. Selected indicators at regional level in Greece 70
A18.1. Financial soundness indicators 71
A19.1. Taxation indicators 74
A20.1. Key economic and financial indicators 76
A21.1. Debt sustainability analysis - Greece 79
A21.2. Heat map of fiscal sustainability risks - Greece 79
A22.1. Assessment of macroeconomic imbalances matrix 80

LIST OF GRAPHS
A1.1. Progress towards the SDGs in Greece in the last 5 years 27
A2.1. Greece’s progress on the 2019-2022 CSRs (2023 European Semester) 30
A3.1. Disbursements per pillar 31
A3.2. Total grants disbursed under the RRF 32
A3.3. Total loans disbursed under the RRF 33
A3.4. Fulfilment status of milestones and targets 33
A4.1. Cohesion policy funds (2021-2027) in Greece: budget by fund 34
A4.2. Synergies between cohesion policy funds and the RRF with its six pillars in Greece 34
A4.3. Cohesion policy funds contribution to the SDGs in 2014-2020 and 2021-2027 in Greece 35
A6.1. Thematic – greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2021 38
A6.2. Energy mix (top) and electricity mix (bottom), 2021 39
A6.3. Thematic – environmental investment needs and current investment, p.a. 2014-2020 40
A7.1. Share of gas consumption per sector, 2021 44
A7.2. Greece´s retail energy prices for industry (top) and households (bottom) 44
A8.1. Fair transition challenges in Greece 48
A8.2. Distributional impacts of energy prices due to rising energy expenditure (2021-2023) 50
A9.1. Trend in material use 51
A9.2. Treatment of municipal waste 51
A11.1. Innovation performance 2015-2022 55
A12.1. Labour productivity, whole economy 57
A12.2. Labour productivity by sectors 57
A12.3. Business and productivity drivers 58
A13.1. Greece. Median time for the adoption of laws, and share of laws adopted in 30 days or less 60
A13.2. Open government data maturity indicator: 2022 scores (% of the total maximum score) (lhs); country ranking, overall score
(rhs) 61
A15.1. Tertiary educational attainment rate (25-34), 2022 66
A16.1. Life expectancy at birth, years 67
A16.2. Projected increase in public expenditure on healthcare over 2019-2070 67
A17.1. GDP per head (2010) and GDP growth (2011-2020) in Greece 69
A18.1. Evolution of credit activity 71
A19.1. Tax revenues from different tax types as % of total taxation 75

24
 A19.2. Tax wedge for single and second earners as a % of total labour costs, 2022 75

LIST OF MAPS
A17.1. Regional Competitiveness Index in Greek regions (2022) 69

25
CROSS-CUTTING INDICATORS
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS
This Annex assesses Greece’s progress on the to meet goals related to SDGs 12 and 13
Sustainable Development Goals (SDGs) along (Responsible consumption and production and
the four dimensions of competitive Climate action). By 2021, the share of renewable
sustainability. The 17 SDGs and their related energy in gross final energy consumption had
indicators provide a policy framework under the reached the EU average (21.9%), albeit starting
UN’s 2030 Agenda for Sustainable Development. from a lower level, while energy productivity had
The aim is to end all forms of poverty, fight increased by 11%. Over the last 5 years, Greece
inequalities and tackle climate change and the has also fared particularly well when it comes to
environmental crisis, while ensuring that no one is net greenhouse gas emissions. These fell by 19%
left behind. The EU and its Member States are between 2016 and 2021, putting Greece in a
committed to this historic global framework better position than the EU average. Meanwhile,
agreement and to playing an active role in access to affordable and clean energy (SDG 7)
maximising progress on the SDGs. The graph remains challenging, with 17.5% of Greece’s
below is based on the EU SDG indicator set population unable to keep their homes adequately
developed to monitor progress on the SDGs in an warm compared to just 6.9% in the EU. On SDG 14
EU context. (Life below water), while Greece’s performance is
close to the EU average, it is moving away from
Greece is improving on SDG indicators the goal, in particular due to a lower share of
related to environmental sustainability coastal water bathing sites with excellent water
(SDGs 2, 6, 7, 9, 11, 12, 13, 15), although it quality and a higher share of marine waters
affected by eutrophication. In 2021-26, the EU
needs to catch up with the EU average on all
Recovery and Resilience Facility will support a
of them. The country has taken important steps
series of measures to promote environmental
Graph A1.1: Progress towards the SDGs in Greece in the last 5 years

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development
indicators – Eurostat (europa.eu). The status of each SDG in a country is the aggregation of all indicators for the specific goal
compared to the EU average. A high status does not mean that a country is close to reaching a specific SDG, but signals that it is
doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country.
Source: Eurostat, latest update of early April 2023, except for the EU Labour Force Survey (LFS) indicators released on 27 April
2023. Data mainly refer to 2016-2021 or 2017-2022.

26
sustainability and the fight against energy poverty, 93% in 2021), adult learning participation (3.5%
including through investments in renewable energy vs 10.8% in 2021), basic digital skills (52.5% vs
sources, sustainable means of transport and 53.9% in 2021) and R&D spending (1.45% of GDP
energy efficiency infrastructures. vs 2.26% in 2021). Decent work and economic
growth indicators (SDG 8) continue to improve, but
While Greece is improving on SDG indicators remain less positive than in other Member States,
related to fairness (SDGs 1, 2, 3, 4, 5, 7, 10), as reflected in the low employment rate (62.6% vs
it needs to catch up with the EU average on 73.1%), the still high share of long-term
almost all of them. While the labour market and unemployed (9.2% vs 2.8%) and young people
social situation has improved in the last 5 years, it who are not in employment, education or training
remains less favourable overall than in the EU as (17.2% vs 13.1%). With support from the EU
a whole. Around 13.9% of people were materially Recovery and Resilience Facility, Greece will upskill
and socially deprived in 2021 compared to only a large part of its working population, expand
6.3% in the EU, while 28.8% of Greece’s childcare facilities and upgrade its university
population was overburdened with housing costs education and research system.
compared to only 8.3% in the EU (SDG 1). Greece
continues to improve on certain equality aspects While Greece is improving on SDG indicators
(SDGs 5 and 10), but these remain less positive related to macroeconomic stability (SDGs 8,
overall than in the EU as a whole. In 2021, the 16, 17), it needs to catch up with the EU
employment rate of women was almost 20 average on all of them. Greece’s GDP per capita
percentage points lower than that of men was EUR 17 610 in 2021, corresponding to around
(compared to only 10.8 percentage points in the 63% of the EU average (EUR 27 880). Despite
EU). Women held only 24% of senior management increasing, investment continues to be relatively
positions and 19% of political positions (against low (SDG 8; 13.3% of GDP in 2021 vs 22.4% in
32.2% and 32.5% respectively in the EU). People in the EU). Some 11.3% of Greece’s working
rural areas in Greece face a disproportionally population was at risk of poverty in 2021
higher risk of poverty or social inclusion than compared to 8.9% in the EU, while only 19.8% of
people in rural areas of the rest of the EU. households have a high-speed internet connection
Concerning health aspects (SDG 3), while healthy according to the latest data, against 70.2% in the
life expectancy (65.9 years) is slightly higher than EU. A higher share of the population (18.1% vs
in the EU (64 years) and more people report being 11.4% in the EU) report crime, violence or
healthy (78.3% vs 69%), a higher and increasing vandalism in their area (SDG 16). The Recovery
share of people smoke (42% in 2021 vs 25% in and Resilience Facility will help bridge a large part
the EU). Despite improving over time, access to of Greece’s investment gap and support broad-
healthcare remains challenging, with 6.4% of the based structural reforms that are expected to
population reporting unmet medical needs in 2021 improve the functioning of the economy at large.
due to costs, distance or waiting times, against
only 2.0% in the EU. Up until 2026, the EU As the SDGs form an overarching framework, any
Recovery and Resilience Facility will support a wide links to relevant SDGs are either explained or
range of measures to promote employment, depicted with icons in the other Annexes.
including among women, the long-term
unemployed and people with disabilities, and
upgrade the national healthcare system.

Greece is improving on SDG indicators

related to productivity (SDGs 4, 8, 9),
although it needs to catch up with the EU
average on all of them. Greece’s education and
innovation performance (SDGs 4 and 9) is mixed,
with better-than-EU average results in early school
leaving (3.2% vs 9.7% in the EU in 2021) and
tertiary educational attainment (44.2% vs 41.2%
in 2021), but with significant challenges in reading
underachievement (30.5% vs 22.5% in 2018),
early childhood education attendance (71.3% vs

27
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC
RECOMMENDATIONS

Table A2.1: Summary table on 2019-2022 CSRs

Greece Assessment in May 2023* RRP coverage of CSRs until 2026** Relevant SDGs
2019 CSR 1 Substantial progress
Achieve a sustainable economic recovery and tackle the excessive
macroeconomic imbalances by continuing and completing reforms in Relevant RRP measures being implemented
Substantial progress SDG 1, 2, 8, 9, 10, 16
line with the post-programme commitments given at the Eurogroup as of 2021.
of 22 June 2018.
2019 CSR 2 Some progress
Focus investment-related economic policy on sustainable transport Relevant RRP measures being implemented
Limited progress SDG 10, 11
and logistics, as of 2021.
environmental protection, energy efficiency, renewable energy and Relevant RRP measures being implemented SDG 6, 7, 9, 10, 11, 12,
Some progress
interconnection projects, as of 2021. 13
Relevant RRP measures being implemented
digital technologies, Some progress SDG 9, 10, 11
as of 2021.
Relevant RRP measures being planned as of
R&D, Some progress SDG 9, 10, 11
2022.
Relevant RRP measures being planned as of
education, Some progress SDG 4, 10, 11
2023.
Relevant RRP measures being planned as of
skills, Some progress SDG 4, 10, 11
2022.
Relevant RRP measures being planned as of
employability, Some progress SDG 8, 10, 11
2022.
Relevant RRP measures being implemented
health, Limited progress SDG 3, 10, 11
as of 2021.
and the renewal of urban areas, taking into account regional Relevant RRP measures being planned as of
Limited progress SDG 1, 2, 10, 11
disparities and the need to ensure social inclusion. 2022.
2020 CSR 1 Limited progress
In line with the general escape clause, take all necessary measures
to effectively address the pandemic, sustain the economy and
support the ensuing recovery. When economic conditions allow,
Not relevant anymore Not applicable SDG 8, 16
pursue fiscal policies aimed at achieving prudent medium-term fiscal
positions and ensuring debt sustainability, while enhancing
investment.
Relevant RRP measures being planned as of
Strengthen the resilience of the health system and Limited progress SDG 3
2022.
Relevant RRP measures being planned as of
ensure adequate and equal access to healthcare. Limited progress SDG 1, 2, 3, 10
2025.
2020 CSR 2 Substantial progress
Mitigate the employment and social impacts of the crisis, including by Relevant RRP measures being planned as of
Full implementation SDG 1, 2, 8, 10
implementing measures such as short-time work schemes and 2023.
Relevant RRP measures being planned as of
ensuring effective activation support. Some progress SDG 8
2023.
2020 CSR 3 Some progress
Swiftly deploy measures to provide liquidity and continued flow of
Relevant RRP measures being implemented
credit and other financing to the economy, focusing in particular on Substantial progress SDG 8, 9
as of 2021.
small and medium-sized enterprises most affected by crisis.
Relevant RRP measures being planned as of
Front-load mature public investment projects and Substantial progress SDG 8, 16
2022.
Relevant RRP measures being implemented
promote private investment to foster the economic recovery. Some progress SDG 8, 9
as of 2021.
Focus investment on the green and digital transition, in particular on Relevant RRP measures being implemented
Limited progress SDG 11
safe and sustainable transport and logistics, as of 2021.
Relevant RRP measures being implemented
clean and efficient production and use of energy, Some progress SDG 7, 9, 13
as of 2021.
Relevant RRP measures being implemented
environmental infrastructure and Limited progress SDG 6, 12, 15
as of 2021.
Relevant RRP measures being planned as of
very-high capacity digital infrastructure and Some progress SDG 9
2022.
Relevant RRP measures being planned as of
skills. Some progress SDG 4
2022.
Improve the effectiveness and digitalisation of the public Relevant RRP measures being implemented
Substantial progress SDG 9, 16
administration and as of 2021.
Relevant RRP measures being planned as of
promote digital transformation of businesses. Some progress SDG 9
2022.
2020 CSR 4 Substantial progress
Continue and complete reforms in line with the post-programme
commitments given at the Eurogroup of 22 June 2018 to restart a Relevant RRP measures being implemented
Substantial progress SDG 1, 2, 8, 9, 10, 16
sustainable economic recovery, following the gradual easing up of as of 2021.
constraints imposed due to the COVID-19 outbreak.
2021 CSR 1 Substantial progress
In 2022, use the Recovery and Resilience Facility to finance
additional investment in support of the recovery while pursuing a Full implementation Not applicable SDG 8, 16
prudent fiscal policy. Preserve nationally financed investment.
When economic conditions allow, pursue a fiscal policy aimed at
achieving prudent medium-term fiscal positions and ensuring fiscal Substantial progress Not applicable SDG 8, 16
sustainability in the medium term.
(Continued on the next page)

28
 Table (continued)
At the same time, enhance investment to boost growth potential. Pay
particular attention to the composition of public finances, on both the
revenue and expenditure sides of the budget, and to the quality of
Substantial progress Not applicable SDG 8, 16
budgetary measures in order to ensure a sustainable and inclusive
recovery. Prioritise sustainable and growth-enhancing investment, in
particular investment supporting the green and digital transition.
Give priority to fiscal structural reforms that will help provide
financing for public policy priorities and contribute to the long-term
sustainability of public finances, including, where relevant, by Limited progress Not applicable SDG 8, 16
strengthening the coverage, adequacy and sustainability of health
and social protection systems for all.
2022 CSR 1 Some progress
In 2023, ensure prudent fiscal policy, in particular by limiting the
growth of nationally financed primary current expenditure below
medium-term potential output growth, taking into account continued
Full implementation Not applicable SDG 8, 16
temporary and targeted support to households and firms most
vulnerable to energy price hikes and to people fleeing Ukraine. Stand
ready to adjust current spending to the evolving situation.
Expand public investment for the green and digital transitions, and
for energy security taking into account the REPowerEU initiative,
Limited progress Not applicable SDG 8, 16
including by making use of the Recovery and Resilience Facility and
other Union funds.
For the period beyond 2023, pursue a fiscal policy aimed at
achieving prudent medium-term fiscal positions and ensuring
Substantial progress Not applicable SDG 8, 16
credible and gradual debt reduction and fiscal sustainability in the
medium term through gradual consolidation, investment and reforms.

Building on reforms undertaken as part of the recovery and

resilience plan, improve the investment-friendliness of the taxation No progress Not applicable SDG 8, 10, 12
system by introducing a wider advance tax-ruling system
Relevant RRP measures being implemented
and review the structure of the tax burden on the self-employed. Some progress SDG 8, 10, 12
as of 2022.
Safeguard the efficiency of the public administration while ensuring it
Relevant RRP measures being implemented
can attract the right skills and preserving consistency with the unified Some progress SDG 16
as of 2022.
wage grid.
2022 CSR 2 Substantial progress
Proceed with the implementation of its recovery and resilience plan, RRP implementation is monitored by assessing RRP payment requests and analysing reports published
in line with the milestones and targets included in the Council twice a year on the achievement of the milestones and targets. These are to be reflected in the country
Implementing Decision of 13 July 2021. reports.
Swiftly finalise the negotiations with the Commission on the
2021–2027 cohesion policy programming documents with a view to Progress on the cohesion policy programming documents is monitored under the EU cohesion policy.
starting their implementation.
Complete outstanding reforms that have been pursued under Relevant RRP measures being implemented
Substantial progress SDG 3, 8, 9
enhanced surveillance, including the cadastre reform. as of 2022.
2022 CSR 3 Limited progress
With a view to ensuring adequate and equal access to healthcare,
complete the rollout of the primary healthcare reform in line with the
Relevant RRP measures being planned as of
framework amended under enhanced surveillance, including staffing Limited progress SDG 3
2023.
of all primary healthcare units, implementing population registration
and introducing effective gatekeeping by general practitioners.
2022 CSR 4 Some progress
Reduce overall reliance on fossil fuels, and diversify imports of fossil Relevant RRP measures being implemented
Limited progress SDG 7, 9, 13
fuels as of 2022.
by accelerating deployment of renewable energy and the
Relevant RRP measures being implemented
development of infrastructure that would enable renewable Some progress SDG 7, 9, 13
as of 2022.
hydrogen.
Also address dependency through ensuring sufficient capacity of
Relevant RRP measures being planned as of
electricity networks and interconnections as well as gas Some progress SDG 7, 9, 13
2023.
interconnections and diversifying gas supply routes.
Relevant RRP measures being implemented
Strengthen the energy services market framework No progress SDG 7, 9, 13
as of 2022.
and step up energy efficiency-enhancing measures through reforms
Relevant RRP measures being implemented
and market incentives to support the decarbonisation of the building Some progress SDG 7
as of 2022.
sector
Relevant RRP measures being implemented
and the transport sector, particularly by promoting electric mobility. Some progress SDG 11
as of 2022.

Note:
* See footnote (51).
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the
RRP are necessary to fully implement CSRs and address their underlying challenges. Measures indicated as 'being implemented'
are only those included in the RRF payment requests submitted and positively assessed by the European Commission.
Source: European Commission.

The Commission has assessed the 2019-2022

country-specific recommendations (CSRs) (50) 2021 CSRs: EUR-Lex - 32021H0729(08) - EN - EUR-Lex
(europa.eu)
2020 CSRs: EUR-Lex - 32020H0826(08) - EN - EUR-Lex
(europa.eu)
(50) 2022 CSRs: EUR-Lex - 32022H0901(08) - EN - EUR-Lex 2019 CSRs: EUR-Lex - 32019H0905(08) - EN - EUR-Lex
(europa.eu) (europa.eu)

29
addressed to Greece as part of the European
Semester. These recommendations concern a
wide range of policy areas that are related to 14
of the 17 Sustainable Development Goals (see
Annexes 1 and 3). The assessment considers the
policy action taken by Greece to date (51) and the
commitments in its recovery and resilience plan
(RRP) (52). At this stage of RRP implementation,
70% of the CSRs focusing on structural issues
from 2019-2022 have recorded at least ‘some
progress’, while 25% recorded ‘limited progress’
(see Graph A2.1). As the RRP is implemented
further, considerable progress in addressing
structural CSRs is expected in the years to come.

Graph A2.1: Greece’s progress on the 2019-2022

CSRs (2023 European Semester)

Full No progress
implementation 5%
7% Limited
Substantial progress
progress 25%
21%

Some
progress
42%

Source: European Commission.

(51) Including policy action reported in the national reform

programme and in Recovery and Resilience Facility (RRF)
reporting (twice a year reporting on progress in implementing
milestones and targets and resulting from the payment
requests assessment).
(52) Member States were asked to effectively address all or a
significant subset of the relevant country-specific
recommendations issued by the Council in 2019 and 2020 in
their RRPs. The CSR assessment presented here considers the
degree of implementation of the measures included in the
RRP and of those carried out outside of the RRP at the time
of assessment. Measures laid down in the Annex of the
adopted Council Implementing Decision on approving the
assessment of the RRP, which are not yet adopted or
implemented but considered credibly announced, in line with
the CSR assessment methodology, warrant ‘limited progress’.
Once implemented, these measures can lead to
‘some/substantial progress or full implementation’,
depending on their relevance.

30
ANNEX 3: RECOVERY AND RESILIENCE PLAN - OVERVIEW
The Recovery and Resilience Facility (RRF) is Scoreboard (29). The Scoreboard also gives an
the centrepiece of the EU’s efforts to help it overview of the progress made in implementing
recover from the COVID-19 pandemic, speed the RRF as a whole, in a transparent manner. The
up the twin transition and strengthen graphs in this Annex show the current state of play
resilience against future shocks. The RRF of the milestones and targets to be reached by
also contributes to implementation of the Greece and subsequently assessed as
SDGs and helps to address the Country satisfactorily fulfilled by the Commission.
Specific Recommendations (see Annex 4).
EUR 11.10 bn has so far been disbursed to
Greece submitted its initial recovery and resilience
Greece under the RRF. The Commission
plan (RRP) on 27 April 2021. The Commission’s
positive assessment on 17 June 2021 and disbursed EUR 3.96 bn to Greece in pre-financing
on 9 August 2021, equivalent to 13% of the
Council’s approval on 13 July 2021 paved the way
for disbursing EUR 17.8 billion in grants and EUR financial allocation.
12.7 billion in loans under the RRF over the 2021-
Greece’s first payment request was
2026 period.
positively assessed by the Commission,
Since the entry into force of the RRF taking into account the opinion of the
Regulation and the assessment of the Economic and Financial Committee, leading
national recovery and resilience plans, to EUR 3.6 billion being disbursed in financial
geopolitical and economic developments support (net of pre-financing) on
have caused major disruptions across the EU. 8 April 2022. The related 15 milestones and
In order to effectively address these disruptions, targets cover reforms and investments in the
the (adjusted) RRF Regulation allows Member areas of energy efficiency, sustainable mobility,
States to amend their recovery and resilience plan waste management, labour market, taxation
for a variety of reasons. In line with article 11(2) policy, the business environment, healthcare,
of the RRF, the maximum financial contribution for public transport and Greece’s audit and control
Greece was moreover updated on 30 June 2022 to system for the implementation of the RRF.
an amount of EUR 17.4 billion in grants. No
revision was submited at the time of publication of Greece’s second payment request was
this country report. positively assessed by the Commission,
taking into account the opinion of the
Table A3.1: Key elements of the Greek RRP('s) Economic and Financial Committee, leading
to EUR 3.6 billion being disbursed in financial
Current RRP support (net of pre-financing) on
19 January 2023. The related 28 milestones and
Scope Initial plan
targets cover reforms and investments promoting
CID adoption date 13 July 2021 the use of renewable energy, re-organising the
railways sector, and opening up the public bus
EUR 17.8 billion in grants transportation market to improve services and to
Total allocation and EUR 12.7 billion in loans promote a greener bus fleet. Further, three of the
(16.68% of 2021 GDP) milestones and targets concerned the loan part of
the Facility.
106 investments and
Investments and reforms
68 reforms On 16 May 2023, Greece submitted its third
Total number of payment request, for which the Commission’s
331
milestones and targets assessment is ongoing. Overall, Greece reports a
Source: European Commission timely implementation of the milestones and
targets covered by the third payment request,
Greece’s progress in implementing its plan is which does not however prejudge the timing of the
published in the Recovery and Resilience submission of subsequent payment requests or

(29) https://ec.europa.eu/economy_finance/recovery-and-
resilience-scoreboard/country_overview.html

31
Graph A3.1: Disbursements per pillar
3 bn

3 bn

2 bn

2 bn

1 bn

1 bn

0 bn
Green transition Digital Smart, Social and Health, and Policies for the
transformation sustainable and territorial economic, social next generation
inclusive growth cohesion and institutional
resilience

Note: Each disbursement reflects progress in the implementation of the RRF, across the six policy pillars. This graph displays how
disbursements under the RRF (excluding pre-financing) relate to the pillars. The amounts were calculated by linking the milestones
and targets covered by a given disbursement to the pillar tagging (primary and secondary) of their respective measures.
Source: Recovery and Resilience Scoreboard

the Commission’s formal assessment of the Graph A3.2: Total grants disbursed under the RRF
fulfilment of the relevant milestones and targets.

€ 5.75 billion

Note: This graph displays the amount of grants disbursed so

far under the RRF. Grants are non-repayable financial
contributions. The total amount of grants given to each
Member State is determined by an allocation key and the
total estimated cost of the respective RRP.
Source: Recovery and Resilience Scoreboard

32
Graph A3.3: Total loans disbursed under the RRF Graph A3.4: Fulfilment status of milestones and
targets

Satisfactorily
fulfilled

€ 5.35 billion

Not
fulfilled
Note: This graph displays the share of satisfactorily fulfilled
milestones and targets. A milestone or target is satisfactorily
Note: This graph displays the amount of loans disbursed so fulfilled once a Member State has provided evidence to the
far under the RRF. Loans are repayable financial contributions. Commission that it has reached the milestone or target and
The total amount of loans given to each Member State is the Commission has assessed it positively in an implementing
determined by the assessment of its loan request and cannot decision.
exceet 6.8% of its 2019 GNI. Source: Recovery and Resilience Scoreboard
Source: Recovery and Resilience Scoreboard

33
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH
The EU budget of over EUR 1.2 trillion for the use of lignite for electricity generation by
2021-2027 is geared towards implementing 2028. The European Social Fund Plus (ESF+)
the EU’s main priorities. Cohesion policy allocates EUR 2.2 billion to employment, of which
investment amounts to EUR 392 billion across the EUR 750 million will help boost youth employment.
EU and represents almost a third of the overall EU EUR 1.28 billion will contribute to improving
budget, including around EUR 48 billion invested in educational outcomes and promoting sustainable
line with REPowerEU objectives. lifelong learning. Over EUR 57 million will go
towards capacity building for social partners and
Graph A4.1: Cohesion policy funds (2021-2027) in civil society organisations, EUR 672 million
Greece: budget by fund towards tackling child poverty and EUR 360 million
towards helping vulnerable groups overcome
material deprivation.
1.6
3.4
6%
13%

Of the investments mentioned above, EUR

7
28% 1.8 billion will be invested in line with
REPowerEU objectives. This is on top of the EUR
1.1 billion dedicated to REPowerEU under the
13.6
53%
2014-2020 budget. EUR 1.3 billion (2021-2027)
and EUR 0.6 billion (2014-2020) is for improving
CF ERDF ESF+ JTF
energy efficiency; EUR 0.1 billion (2021-2027) and
(1) billion EUR in current prices, % of total; (total amount EUR 0.5 billion (2014-2020) is for renewable
including EU and national co-financing) energy and low-carbon R&I; and EUR 0.4 billion
Source: European Commission, Cohesion Open Data (2021-2027) is for smart energy systems.

In 2021-2027, in Greece, cohesion policy Graph A4.2: Synergies between cohesion policy
funds (30) will invest EUR 10.8 billion in the funds and the RRF with its six pillars in Greece
green transition and EUR 1.4 billion in the 12000 10,765

digital transformation as part of the 10000

country’s total allocation of EUR 25.7 billion. 8000 7,256 6,845

5,302
6000 4,654
In particular, the European Regional Development 4000
4,033

2,216
Fund (ERDF) will boost research and innovation 2000 1,373
632
1,245 743
287

and help at least 34 160 companies grow in

0
Green transition Digital Smart, sustainable Social and territorial Health, economic, Policies for the next
transformation and inclusive cohesion social and generation
sectors directly linked to the smart specialisation growth institutional
resilience

strategy (digital technologies, sustainable energy EU CP 2014-2020 (million EUR) EU CP 2021-2027 (million EUR)

and tourism, culture, creative industries) . Greece is (1) million EUR in current prices (total amount, including EU
expected to achieve a minimum of 30% primary and national co-financing)
energy savings in around 80 000 dwellings in the Source: European Commission
coming years. In addition, EUR 769 million and
EUR 995 million will improve solid waste and In 2014-2020, cohesion policy funds made
water resources management, respectively. These EUR 18 billion available to Greece (31) with an
investments, together with further reforms to absorption of 92% (32). Including national
comply with the Urban Wastewater Directive, will financing, the total investment amounted to EUR
help ensure the sustainability of Greece’s water 22.2 billion - around 1.8% of GDP for 2014-2020.
sector. The Just Transition Fund (JTF) will promote
economic diversification, upskilling and re-skilling
of workers, and job creation in geographical areas
most affected by the energy transition. This will
help Greece fulfill its commitment to phase out (31) Cohesion policy funds include the ERDF, CF, ESF and the
Youth Employment Initiative (YEI). ETC programmes are
excluded here. According to the ‘N+3 rule’, the funds
committed for 2014-2020 must be spent by 2023. REACT-
(30) European Regional Development Fund (ERDF), Cohesion Fund EU is included in all figures. The total amount includes EU
(CF), European Social Fund+ (ESF+), Just Transition Fund and national co-financing. Data source: Cohesion Open Data.
(JTF) excluding Interreg programmes. The total amount
includes national and EU contributions. Data source: (32) 2014-2020 Cohesion policy EU payments by MS is updated
Cohesion Open Data daily on Cohesion Open Data.

34
Greece continues to benefit from cohesion 2014-2022, and it will continue to support Greece
policy flexibility to support recovery, step up with EUR 13.5 billion in 2023-2027. The two CAP
convergence and provide vital support to Funds (European Agricultural Guarantee Fund and
regions following the COVID-19 pandemic. European Agricultural Fund for Rural Development)
The Recovery Assistance for Cohesion and the contribute to the European Green Deal while
Territories of Europe instrument (REACT-EU) (33) ensuring long-term food security. They promote
under NextGenerationEU provides EUR 2 billion on social, environmental and economic sustainability
top of the 2014-2020 cohesion policy allocation and innovation in agriculture and rural areas, in
for Greece. It is expected that REACT-EU will coordination with other EU funds. The European
deliver support to firms affected by COVID-19 and Maritime and Fisheries Fund made EUR 380
help households improve their energy consumption million available to Greece in 2014-2020 and the
classification. Some 272 000 firms and 24 000 European Maritime, Fisheries and Aquaculture
households benefit from this support. With SAFE Fund makes EUR 375 million available in 2021-
(Supporting Affordable Energy), the 2014-2020 2027.
cohesion policy funds may also be mobilised by
Greece to support vulnerable households, jobs and Greece also benefits from other EU
companies particularly affected by high energy programmes, notably the Connecting Europe
prices. Facility, which under CEF 2 (2021-2027) has so
far allocated EU funding of EUR 167.9 million to
Graph A4.3: Cohesion policy funds contribution to six specific projects on strategic transport
the SDGs in 2014-2020 and 2021-2027 in Greece networks. Similarly, Horizon Europe has so far
allocated nearly EUR 41.5 billion for Greek R&I
actors, while in the previous programming period,
10,000 9,316
9,000
8,000 Horizon 2020 earmarked EUR 1.7 billion. The
7,000 6,461 Public Sector Loan Facility established under the
6,000
5,000
5,154 Just Transition Mechanism makes EUR 63 million
4,000
3,880 of grant support from the Commission available
3,000 2,333 2,231 for projects in 2021-2027, which will be combined
2,000 1,547 1,417 1,3231,219 with loans from the EIB to support investments by
1,000
0
public sector entities in just transition regions.
SDG 8 Decent SDG 9 Industry, SDG 4 Quality SDG 7 Affordable SDG 6 Clean water
work and innovation, education and clean energy and sanitation
economic growth infrastructure Greece received support under the European
EU CP 2014-2020 (millions EUR) EU CP 2021-2027 (millions EUR)
instrument for temporary support to
(1) 5 largest contributions to SDGs in million (EUR) current mitigate unemployment risks in an
prices emergency (SURE) to finance short-time work
Source: European Commission
schemes and similar measures to mitigate the
impact of COVID-19. The Council granted financial
In both 2014-2020 and 2021-2027, cohesion
assistance to Greece of EUR 6.2 billion in loans,
policy funds have contributed substantially which supported around 41% of workers and 45%
to the Sustainable Development Goals’ of firms in 2020, and around 17% of workers and
(SDGs). These funds support 11 of the 17 SDGs, 29% of firms in 2021.
notably SDG 8 ‘decent work and economic growth’
and SDG 9 ‘industry, innovation and The Technical Support Instrument (TSI)
infrastructure’ (34). supports Greece in designing and
implementing growth-enhancing reforms,
Other EU funds make significant resources including those set out in its recovery and
available for Greece. The common agricultural resilience plan (RRP). Greece has received
policy (CAP) made available EUR 23.5 billion in significant support since 2015. Examples (35)
include promoting inclusive education by
(33) REACT-EU allocation on Cohesion Open Data. addressing challenges in legislation, educational
(34) Other EU funds contribute to the implementation of the
policy and practice and supporting the efficiency
SDGs. In 2014-2022, this includes both the European
Agricultural Fund for Rural Development (EARDF) and the
European Maritime and Fisheries Fund (EMFF). (35) Country factsheets on reform support are available here.

35
and resilience of the Greek administration by
strengthening evidence-based policymaking.

36
ANNEX 5: RESILIENCE
This Annex illustrates Greece’s relative Compared to the EU average, Greece shows
resilience capacities and vulnerabilities using an overall lower level of capacities across all
the Commission’s resilience dashboards RDB indicators. It has overall medium-low
(RDB) (36). Comprising a set of 124 quantitative resilience capacities in the social and economic
indicators, the RDB provide broad indications of and digital dimensions, and medium capacities in
Member States’ ability to make progress across the green and geopolitical dimensions. Greece
four interrelated dimensions: social and economic, shows stronger capacities than the EU average in
green, digital, and geopolitical. The indicators show the areas 'ecosystems, biodiversity and
vulnerabilities (37) and capacities (38) that can sustainable agriculture’ and ‘value chains and
become increasingly relevant, both to navigate trade’. It has significant room for improving
ongoing transitions and to cope with potential capacities compared to the EU in the areas
future shocks. To this end, the RDB help to identify ‘inequalities and the social impact of the
areas that need further efforts to build stronger transitions’, ‘climate change mitigation and
and more resilient economies and societies. They adaptation’, ‘digitalisation for public space’, and
are summarised in Table A5.1 as synthetic ‘financial globalisation’, among others
resilience indices, which illustrate the overall
relative situation for each of the four dimensions Table A5.1: Resilience indices summarising the
and their underlying areas for Greece and the EU- situation across RDB dimensions and areas
27 (39). Dimension/Area Vulnerabilities Capacities
EL EU-27 EL EU-27
Social and economic
According to the set of resilience indicators Inequalities and social impact of
under the RDB, Greece generally displays a the transitions
Health, education and work
similar, but somewhat higher level of Economic & financial stability
vulnerabilities compared to the EU average. and sustainability
Green
Greece exhibits medium-high vulnerabilities in the
Climate change mitigation &
social and economic dimension of the RDB, adaptation

medium vulnerabilities in the geopolitical and

Sustainable use of resources

digital dimensions, and medium-low vulnerabilities Ecosystems, biodiversity,

sustainable agriculture
in the green dimension. Compared to the EU Digital

average, Greece faces higher vulnerabilities in the Digital for personal space

areas ‘economic and financial stability and Digital for industry

Vulnerabilities Index
sustainability’, ‘health, education and work’, Digital for public space High

digitalisation of personal space and industry, as

Medium-high
Cybersecurity Medium

well as ‘financial globalisation’. It displays lower Geopolitical

Medium-low
Low
vulnerabilities than the EU average in the areas Raw material and energy supply
Not available

‘sustainable use of resources’, ‘ecosystems, Value chains and trade

Capacities Index
High
biodiversity and sustainable agriculture’ and Medium-high
Financial globalisation Medium
‘cybersecurity’. Medium-low
Security and demography Low
Not available

(1) Data are for 2021, and EU-27 refers to the value for the
EU as a whole. Data underlying EU-27 vulnerabilities in the
(36) For details see https://ec.europa.eu/info/strategy/strategic- area ‘value chains and trade’ are not available as they
planning/strategic-foresight/2020-strategic-foresight- comprise partner concentration measures that are not
report/resilience-dashboards_en; see also 2020 Strategic comparable with Member States’ level values.
Foresight Report (COM(2020) 493). Source: JRC Resilience Dashboards - European Commission

(37) Vulnerabilities describe features that can exacerbate the

negative impact of crises and transitions, or obstacles that
may hinder the achievement of long-term strategic goals.
(38) Capacities refer to enablers or abilities to cope with crises
and structural changes and to manage the transitions.
(39) This Annex is linked to Annex 1 on SDGs, Annex 6 on the
green deal, Annex 8 on the fair transition to climate
neutrality, Annex 9 on resource productivity, efficiency and
circularity, Annex 10 on the digital transition and Annex 14
on the European pillar of social rights.

37
ENVIRONMENTAL SUSTAINABILITY
ANNEX 6: EUROPEAN GREEN DEAL
Greece’s green transition requires continued objectives (44). In May 2022, the parliament passed
action on several aspects including a national climate law, aligned with the EU
renewables and energy efficiency. objective of cutting greenhouse emissions by at
Implementation of the European Green Deal is least 55% by 2030, 80% by 2040 and the aim to
underway in Greece; this Annex provides a achieve climate neutrality by 2050. The law also
snapshot of the key areas involved (40). strengthens climate goals on adaptation, carbon
budgeting and mitigation in electricity production,
Greece is projected to meet its 2030 climate transport and buildings.
policy target for the effort sharing sectors
by a comfortable margin (41). Data for 2021 on Graph A6.1: Thematic – greenhouse gas emissions
the greenhouse gas emissions generated by from the effort sharing sectors in Mt CO2eq,
Greece in these sectors are expected to show that 2005-2021
the country generated less than its annual 70

emission allocations (42). Current policies are 60

projected to reduce these emissions by -27% 50

relative to 2005 levels in 2030, more than 40

sufficient to reach both the effort sharing target 30

and Greece’s new target, in line with the EU’s 55% 20

objective, of a -22.7% reduction. The additional 10

measures tabled would bring a sharper reduction 0

in emissions of -36% (43). In its recovery and 2005 2021

Domestic transport (excl. aviation) Buildings (under ESR) Agriculture Small industry Waste
resilience plan, Greece has attributed 37.5% of its
Recovery and Resilience Fund allocation to key Source: European Environmental Agency.
reforms and investments to attain the climate
Greece is on track to meet its net carbon
removals target for 2030 in the land use
(40) The overview in this Annex is complemented by the sector. Greece’s mitigation action in the land use,
information provided in Annex 7 on energy security and land use change and forestry (LULUCF) sector has
affordability, Annex 8 on the fair transition to climate
neutrality and environmental sustainability, Annex 9 on
remained very stable for over a decade, removing
resource productivity, efficiency and circularity, Annex 11 on about 5 000 kt CO2eq a year (see Table A6.1) (45).
innovation, and Annex 19 on taxation. Greece could further increase its carbon removals
(41) Member States’ greenhouse gas emission targets for 2030 through carbon farming, the sustainable
(‘effort sharing targets’) were increased by Regulation (EU) management of existing forests and prompt
2023/857 (the Effort Sharing Regulation) amending replacement of harvested or damaged forests.
Regulation (EU) 2018/842, aligning the action in the
concerned sectors with the objective to reach EU-level,
economy-wide greenhouse gas emission reductions of at Fossil fuels still play an important role in
least 55% relative to 1990 levels. The Regulation sets Greece’s energy mix but it expects to phase
national targets for sectors outside the current EU Emissions out coal and oil gradually. In the last decade,
Trading System, notably: buildings (heating and cooling), road
transport, agriculture, waste, and small industry. Emissions coal share in the energy mix reduced sharply from
covered by the EU ETS and the Effort Sharing Regulation are 26% in 2011 to 8% in 2021, while in the case of
complemented by net removals in the land use sector, oil only a slight reduction from 56% in 2011 to
regulated by Regulation (EU) 2018/841 (the Land Use, Land 48% in 2021. On the other hand, gas share in the
Use Change and Forestry (LULUCF) Regulation) amended by
Regulation (EU) 2023/839. energy mix has been increasing to reach 26% in
2021 (an increase of 13pp when compared with
(42) Greece’s annual emission allocations for 2021 were some
45.8 Mt CO2eq, and its approximated 2021 emissions were
2011). Greece has an ambitious plan to
42.7 Mt (see European Commission, Accelerating the decommission its lignite plants by 2028, a target
transition to climate neutrality for Europe’s security and
prosperity: EU Climate Action Progress Report 2022, (44) For example, significant investments in irrigation and flood
SWD(2022)343). mitigation with measures for sustainable water
management, as well as on the renovation of buildings.
(43) See the information on the distance to the 2030 climate
policy target in Table A6.1. Existing and additional measures (45) This value is indicative and will be updated in 2025 (as
as of 15 March 2021. mandated by Regulation (EU) 2023/839).

38
enshrined in the national energy and climate plan climate and energy targets in the Fit for 55
and Greece’s first ever Climate law. By 2030, Package and in the REPowerEU Plan. Greece’s
Greece expects to increase the share of natural recovery and resilience plan includes the
gas and renewables in the energy mix, with coal installation of 3GW of new renewable energy
disappearing and oil falling considerably. In 2021, (wind and solar) by the end of 2025 and the
renewable energy and natural gas made up the installation of storage systems (1380MW) to
bulk of Greece’s electricity mix, at 41% each. facilitate the integration of new renewable energy
capacity. In 2022, Greece has taken steps to
Graph A6.2: Energy mix (top) and electricity mix streamline the licensing framework for renewable
(bottom), 2021 energy and recently adopted laws laying down the
first legal framework for the development of
offshore wind farms as well as establishing a
framework for Guarantees of Origin. The electricity
18%
8% interconnection of the Cyclades islands and
Solid fossil fuels, upgrades to the electricity network will further
peat and oil shale boost the penetration of renewable energy in
26% Gas Greece’s electricity mix.

Oil Greece has a high untapped potential to

make energy savings. Greece´s NECP targets
Renewables for primary and final energy consumption (PEC
and FEC) were considered of modest and low
48% ambition respectively in the 2020 Commission
assessment. Based on the energy consumption
trajectory for 2018-2021, Greece is expected to be
10%
on track to meet its 2030 target for PEC and for
FEC, as these were notified in its NECP (46). Despite
Solid fossil fuels, the action taken on energy efficiency, Greece
41% peat and oil shale
needs to further unlock its potential for energy
Gas efficiency. Its recovery and resilience plan includes
projects to improve energy efficiency by
Oil
renovating private-sector and public-sector
Renewables buildings, notably through loans for private sector
41% investments enhancing actions from the Loan
8%
Facility. The national energy and climate plan
proposes additional actions that could be taken,
especially in the buildings, water and transport
sectors, promoting energy services, market
mechanisms and innovative financial instruments
The energy mix is based on gross inland consumption, and for energy efficiency.
excludes heat and electricity. The share of renewables
includes biofuels and non-renewable waste.
The transition to a sustainable transport
Source: Eurostat
Source: system remains a key challenge. The take-up
of electric vehicles is still very slow, though
Renewable energy sources play an important accelerating. The market is undeveloped, reflecting
role in Greece’s energy system. In 2021, the lack of charging infrastructure. Investments
and reforms included in the recovery and resilience
Greece’s share of renewable energy sources in
plan such as the installation of publicly accessible
gross final energy consumption was 21.93% (an
charging stations aim to help overcome these
increase of almost 12pp when compared with
2011). Greece’s target of 35% of share of energy
from renewable sources in gross final energy (46) After the conclusion of the negotiations for a recast EED, the
consumption by 2030 included in the NECP was ambition of both the EU and national targets as well as of
considered sufficiently ambitious. Greece will need the national measures for energy efficiency to meet these
to increase its renewable energy target in the targets is expected to increase”
updated NECP to reflect the more ambitious EU

39
challenges. Greece has one of the highest allocate sufficient resources to the protection and
congestion rates in the EU. The railways sector is management of these sites. Site-specific
small and the main line between Athens and conservation objectives, conservation measures,
Thessaloniki, which could substitute the very and management plans have yet to be drawn up
lucrative short-haul flights between the two cities, for several sites.
is underused. There are no zero-emission
passenger ships between the islands and the Climate change is affecting many sectors in
mainland. Individual transport exacerbates Greece, with adaptation challenges
seasonal problems with air pollution and leads to concerning water management in
significant health and economic costs, in Athens particular (50). Affected sectors include energy
and Thessaloniki in particular. supply, the built environment, agriculture, and
tourism. These all depend on water, which is
Graph A6.3: Thematic – environmental investment becoming increasingly scarce (51). Heat-related
needs and current investment, p.a. 2014-2020 mortality and morbidity rates are projected to rise
1800.0 significantly. Greece’s recovery and resilience plan
1,552
1600.0
includes measures on reforestation, water
management, and the protection and restoration
1400.0
of biodiversity and ecosystems. It also has
renovation measures that aim to increase the
EUR million (at current prices)

1200.0
977
926
1000.0 resilience of cities and their building stocks to
800.0
climate change. Greece has a wide insurance
604
protection gap for wildfires, which could pose a
600.0
575 risk to public finances if the insurance coverage
505
400.0 453 201 remains low (52).
200.0

0.0
130 174
Greece provides fossil fuel and other
Pollution Water (industries, Circular economy Biodiversity and R&I&D and other
prevention and excl. protection) (incl. waste) ecosystems
environmentally harmful subsidies that could
control be considered for reform, while ensuring
Current investment Total need
food and energy security and mitigating
Source: European Commission. social effects. Fossil fuel subsidies amounted to
EUR 1.3 billion in 2021, putting low carbon
Greece would benefit from investing more in alternatives at a disadvantage. Environmentally
environmental protection, in protecting harmful subsidies have been identified, via an
biodiversity and in tackling pollution. (47) initial assessment, in the agriculture, forestry and
Between 2014 and 2020, the environmental fishing, electricity, gas, steam and air conditioning,
investment needs were estimated to be at least transportation and storage, mining and quarrying,
EUR 4.3 billion while investment was at about manufacturing, water supply and sewerage,
EUR 1.8 billion, leaving a gap of at least EUR 2.4 accomodation and food services sectors. Examples
billion per year (see Graph A6.3) (48). Greece’s of such subsidies include the excise tax refund for
Natura 2000 network covers 27.3% of its land diesel fuel used in agriculture, the reduced energy
area (49) and 19.6% of its sea area. It has yet to tax rate for light fuel oil used in mobile machinery,
the excise tax exemption on the use of natural
gas, the reimbursement of excise duty on diesel
(47) Environmental objectives include pollution prevention and used in freight and other categories of passenger
control, water management and industries, circular economy transport, the excise duty exemption for natural
and waste, biodiversity and ecosystems (European
Commission, 2022, Environmental Implementation Review,
country report Greece). (50) European Environmental Agency, Advancing towards climate
resilience in Europe, forthcoming.
(48) When also accounting for needs estimated at EU level only
(e.g., water protection, higher circularity, biodiversity (51) According to the 6th IPCC climate adaptation report, in
strategy). southern Europe, more than a third of the population will be
exposed to water scarcity at global warming of 2°C.
(49) In 2021, Greece had 35.0% terrestrial protected areas
(Natura 2000 and nationally designated areas), against the (52) European Insurance and Occupational Pensions Authority
EU average of 26.4% (European Environment Agency, 2023, (EIOPA) dashboard on insurance protection gap for natural
Natura 2000 Barometer). catastrophes.

40
gas used as motor fuel or the excise tax
exemption and tax relief for natural gas for
industrial consumers (53). A mapping of all
environmentally harmful subsidies by Greece
would help prioritise candidates for reform.

Greece is taking steps to align environmental

taxation with the polluter pays principle.
Greece’s revenues from environmental taxes have
been above the EU average (see Annex 19). Under
the reform of the waste sector in its recovery and
resilience plan, Greece reintroduced a landfill tax,
expected to improve waste management and
recycling rates. Its application was scheduled for
2022 but it has not yet been enforced. Greece also
recently brought in a resource charge for water,
with tariffs differentiated by types of use and
sources. The recovery and resilience plan also
includes establishing a national waste regulatory
authority, to reform the regional and local waste
management bodies and bring in sound costing
and pricing policies, and the creation of a
regulatory authority for streamlining the
management of water resources. A single
Regulatory Authority for Energy, Waste and Water
was established through Law 5037/2023, in March
2023.

(53) Fossil fuel figures in EUR of 2021 from the 2022 State of
the Energy Union report. Initial assessment of
environmentally harmful subsidies done by the Commission
in the 2022 toolbox for reforming environmentally harmful
subsidies in Europe, using OECD definitions, and based on the
following datasets: OECD Agriculture Policy Monitoring and
Evaluations; OECD Policy Instruments for the Environment
(PINE) Database; OECD Statistical Database for Fossil Fuels
Support; IMF country-level energy subsidy estimates. Annex 4
of the toolbox contains detailed examples of subsidies on
the candidates for reform.

41
Table A6.1: Indicators tracking progress on the European Green Deal from a macroeconomic perspective
'Fit for 55'
2030 Distance
2005 2017 2018 2019 2020 2021 target/value WEM WAM
(1)
Greenhouse gas emission reductions in effort sharing sectors Mt CO2eq; %; pp 62.6 -27% -29% -28% -31% - -22.7% 4.3 13.3
Progress to policy targets

Net carbon removals from LULUCF (2) kt CO2eq -3,529 -4,111 -4,945 -5,401 -5,416 -5,476 -4373 n/a n/a

National contribution to 2030 EU target

2005 2017 2018 2019 2020 2021
Share of energy from renewable sources in gross final
% 7% 17% 18% 20% 22% 22% 35%
consumption of energy (3)
Energy efficiency: primary energy consumption (3) Mtoe 30.3 23.2 22.6 22.3 19.2 20.3 20.6
Energy efficiency: final energy consumption (3) Mtoe 21.0 16.4 15.9 16.2 14.5 15.2 16.5

Greece EU
2016 2017 2018 2019 2020 2021 2019 2020 2021
Environmental taxes (% of GDP) % of GDP 3.8 4.0 3.8 3.9 3.8 3.9 2.4 2.2 2.2
Fiscal and financial

Environmental taxes (% of total taxation) (4) % of taxation 9.8 10.2 9.5 9.8 9.7 10.0 5.9 5.6 5.5
indicators

Government expenditure on environmental protection % of total exp. 3.0 2.9 2.9 2.9 2.7 2.1 1.7 1.6 1.6
Investment in environmental protection (5) % of GDP 0.2 0.2 0.2 0.2 0.0 - 0.4 0.4 0.4
Fossil fuel subsidies (6) EUR2021bn 1.5 1.7 1.6 1.9 1.4 1.3 53.0 50.0 -
Climate protection gap (7) score 1-4 2.2 2.4 1.5
Net greenhouse gas emissions 1990 = 100 89.0 94.0 91.0 85.0 72.0 73.0 76.0 69.0 72.0
Climate

Greenhouse gas emission intensity of the economy kg/EUR'10 0.56 0.59 0.57 0.53 0.50 - 0.31 0.30 0.26
Energy intensity of the economy kgoe/EUR'10 0.13 0.13 0.13 0.12 0.12 - 0.11 0.11 -
Final energy consumption (FEC) 2015=100 101.2 99.1 96.1 97.8 87.3 91.8 102.9 94.6 -
Energy

FEC in residential building sector 2015=100 97.5 98.9 87.8 92.2 96.2 95.1 101.3 101.3 106.8
FEC in services building sector 2015=100 108.7 116.9 111.7 113.9 101.5 109.1 100.1 94.4 100.7
Smog-precursor emission intensity (to GDP) (8) tonne/EUR'10 3.7 3.9 4.1 3.9 3.9 - 0.9 0.9 -
Pollution

Years of life lost due to air pollution by PM2.5 per 100.000 inh. 1205.0 1926.7 1086.7 883.6 804.3 - 581.6 544.5 -
Years of life lost due to air pollution by NO2 per 100.000 inh. 229.1 309.5 255.1 216.5 171.4 - 309.6 218.8 -
Nitrates in ground water mg NO3/litre - - - - - - 21.0 20.8 -
Land protected areas % of total 34.1 34.8 - 30.2 34.8 35.0 26.2 26.4 26.4
Biodiversity

Marine protected areas % of total 6.5 - - 19.7 - 19.8 10.7 - 12.1

% of total utilised
Organic farming 6.5 8.0 9.3 10.3 10.2 - 8.5 9.1 -
agricultural area

2017 2018 2019 2020 2021 2022 2020 2021 2022

% in new
Share of zero-emission vehicles (9) registrations
0.0 0.1 0.2 0.8 2.2 2.6 5.4 8.9 10.7
Mobility

Number of AC/DC recharging points (AFIR categorisation) - - - 286 626 926 188626 330028 432518
Share of electrified railways % 23.8 29.6 32.1 n/a n/a 31.2 56.6 n/a 56.6
Hours of congestion per commuting driver per year 36.3 37.7 36.1 36.9 n/a n/a 28.7 n/a n/a

Sources: (1) Historical and projected emissions, as well as Member States’ climate policy targets and 2005 base year emissions
under the Effort Sharing Decision (for 2020) are measured in global warming potential (GWP) values from the 4th Assessment
Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ climate policy targets and 2005 base
year emissions under the Effort Sharing Regulation (for 2030) are in GWP values from the 5th Assessment Report (AR5). The
table above shows the base year emissions 2005 under the Effort Sharing Decision, using AR4 GWP values. Emissions for 2017-
2021 are expressed in percentage change from 2005 base year emissions, with AR4 GWP values. 2021 data are preliminary. The
table shows the 2030 target under Regulation (EU) 2023/857 that aligns it with the EU’s 55% objective, in percentage change
from 2005 base year emissions (AR5 GWP). Distance to target is the gap between Member States’ 2030 target (with AR5 GWP
values) and projected emissions with existing measures (WEM) and with additional measures (WAM) (with AR4 GWP values), in
percentage change from the 2005 base year emissions. Due to the difference in global warming potential values, the distance to
target is only illustrative. The measures included reflect the state of play as of 15 March 2021.
(2) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2023
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839
amending Regulation (EU) 2018/841 (LULUCF Regulation) – Annex IIa, kilotons of CO2 equivalent, based on 2020 submissions.
(3) Renewable energy and energy efficiency targets and national contributions are in line with the methodology established under
Regulation (EU) 2018/1999 (Governance Regulation).
(4) Percentage of total revenue from taxes and social contributions (excluding imputed social contributions). Revenue from the EU
Emissions Trading System is included in environmental tax revenue.
(5) Expenditure on gross fixed capital formation for the production of environmental protection services (abatement and
prevention of pollution) covering government, industry, and specialised providers.
(6) European Commission, Study on energy subsidies and other government interventions in the European Union, 2022 edition.
(7) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters. This
indicator is based on modelling of the current risk from floods, wildfires and windstorms as well as earthquakes, and an
estimation of the current insurance penetration rate. The indicator does not provide information on the split between the
private/public costs of climate-related disasters. A score of 0 means no protection gap, while a score of 4 corresponds to a very
high gap (EIOPA, 2022).
(8) Sulphur oxides (SO2 equivalent), ammonia, particulates < 10 µm, nitrogen oxides in total economy (divided by GDP).
(9) Battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV).

42
ANNEX 7: ENERGY SECURITY AND AFFORDABILITY
Before Russia invaded Ukraine, Greece had a Despite not having underground storage
relatively medium exposure to Russian gas facilities, Greece has been taking measures
and oil, slightly below the EU average. to safeguard its gas security of supply. To
However, it is highly dependent on imported minimise any potential disruption to Russian
fossil fuels in general. This makes its supplies in winter 2022-2023, the Greek
economy particularly sensitive to global price Transmission System Operator (TSO) procured
developments, requiring it to step up efforts and put into operation a floating storage unit in
on the energy transition. This Annex (54) sets November 2022, for 12 to 18 months, in
out the actions carried out by Greece to achieve Revythousa. In February 2022, Greece and
the REPowerEU objectives, including through the Bulgaria signed a Memorandum of Understanding
implementation of its recovery and resilience plan, including an agreement on storage.
in order to improve energy security and
affordability while accelerating the clean energy The commissioning of the Gas Interconnector
transition, and contributing to enhancing the EU’s Greece Bulgaria (IGB) has improved the
competitiveness in the clean energy sector (55). diversification of supply in Bulgaria. IGB is
part of the Vertical Gas Corridor Greece-Bulgaria-
Greece has showed a high level of gas supply Romania-Hungary. It provides access to natural
security in the face of challenging gas from the Southern Gas Corridor and LNG to
circumstances that the EU faced, South Eastern and Central Europe as well as
contributing to the overall European security Ukraine. The IGB expansion project is crucial for
increasing IGB transmission capacity from 3
of supply. In 2022, domestic gas demand
bcm/year to 5 bcm/year. The expansion project has
amounted to nearly 4.9 billion cubic metres
been recognised as one of the most efficient
(bcm)/year. 73% of these volumes were used to
solutions for removing bottlenecks between
generate electricity. The Greek gas transmission
Greece, TAP systems and Bulgaria as it will deliver
system is interconnected to the Central and South
gas from TAP to the Bulgarian system. The
Easter Europe energy connectivity (CESEC) system,
increase in IGB capacity is listed in Annex 3 of the
to the Turkish one through Kipoi and the Trans
RePowerEU action plan.
Adriatic Pipeline (TAP) and to the Italian gas
system through TAP. Greece is a liquefied natural
Greece managed to reduce energy
gas (LNG) entry point thanks to the terminal at
consumption in 2022. In the period August
Revythousa. Revythousa is a significant supply
entry point that covers around 44% of imports. In 2022-March 2023, Greece reduced its natural gas
terms of the remaining entry points, the entry consumption by almost 22%. compared when
point of Sidirokastro covers 35% of imports, compared to the previous 5-years average (57).
followed by the Nea Mesimvria entry point (where Then, based on data from the power grid operator
supply increased by 18% compared to the same IPTO’s monthly reports, Greece appears to be on
period in 2021). The interconnection point in Kipoi, the right path to achieving its electricity energy-
Evros covers 2.5% of imports. On top of Russian saving goals. This downward trend highlights the
pipeline gas imported, Greece imported 2.03 TW of efforts being made by consumers to keep their
Russian LNG in 2022 (56). energy costs down. It is also boosted by national
measures that envisage among other things
further subsidies in residential electricity tariffs for
(54) It is complemented by Annex 6 as the European Green Deal households that reduce their average daily
focuses on the clean energy transition, by Annex 8 on the consumption by 15% compared to last year.
actions taken to mitigate energy poverty, including the most
vulnerable ones, by Annex 9 as the transition to a circular
economy will unlock significant energy and resource savings,
further strengthening energy security and affordability, and
by Annex 12 on industry and single market complementing
ongoing efforts under the European Green Deal and
REPowerEU.
(55) In line with the Green Deal Industrial Plan COM(2023) 62
final, and the proposed Net-Zero Industry Act COM(2023) (57) EU countries agreed to reduce their gas demand by 15%
161 final compared to their average consumption in the past 5 years,
between 1 August 2022 and 31 March 2023, with measures
(56) Greek TSO (DESFA) Natural Gas Data 2022 of their own choice.

43
Graph A7.1: Share of gas consumption per sector, recently reverted to the EU average level. Final
2021 prices charged to Greek consumers were
significantly lowered, for instance by over 50% for
9.2%
0.1%
residential gas customers and up to 90% for
0.4%
2.6%
Energy electricity customers. This was thanks to
supporting measures funded primarily by the
Industry
14.9% newly established Energy Transition Fund and
Transport secondarily by the state budget amounting to
Services and public sector
around EUR 8 billion. In addition, Greece introduced
a retroactive 90% windfall profit tax on energy
Households
companies. The proceeds of this scheme were
72.8%
Agriculture, forestry and used to provide relief to energy consumers.
fishery
Despite the support offered, industry and low-
income families could be severely impacted. The
latter in particular could find it even harder to
Source: Eurostat
cover their basic needs such as keeping their
homes adequately warm and could find
Graph A7.2: Greece´s retail energy prices for themselves at higher risk of falling into arrears
industry (top) and households (bottom) with their energy bills (see Annex 8).
300

250
Greece is lagging behind on certain aspects
200
related to the electricity market that could
potentially deprive consumers of access to
€/MWh

150
more affordable energy and undermine their
100
ability to participate in the energy transition.
50
As shown in the latest report published by the EU
0
Agency for the Cooperation of Energy Regulators
(ACER) (58), Greece was one of the countries with
Gas Greece Gas EU Electricity Greece Electricity EU the least penetration of smart meters in 2021
(only 3% compared to the EU average of 54%).
300
Smart meters are a tool that enable consumers to
250
actively participate in the market and support
200 demand response. Along with demand reduction,
€/MWh

150 they play an important role in combating the

100
current crisis and the high energy prices faced by
50
consumers, as highlighted by ACER (59). The Greek
network operator HEDNO plans to roll out some
7.5 million smart meters across the country by
0

2030, replacing standard meters; a tender for this

Gas Greece Gas EU Electricity Greece Electricity EU project is currently ongoing (60). Public Power
(1) On electricity, the band consumption is DC for households
Cooperation's market share in the retail market is
and ID for industry presently around 60% (61), with low voltage
(2) On gas, the band consumption is D2 for households and I4 customers accounting for 65% of the share. This is
for industry still well above the 50% target mandated by
Source: Eurostat national legislation. To further bolster competition
and encourage investment in the sector, the
Final energy prices charged to Greek
consumers were significantly reduced thanks
to public support measures. During the first (58) ACER/CEER (2022), Annual Report on the Results of
Monitoring the Internal Electricity and Natural Gas Markets in
half of 2022, retail electricity prices for the 2021.
industry in Greece were higher than the EU
(59) Idem.
average level. By contrast, household electricity
prices (though increasing) were well below the EU (60) HEDNO communication.
average. During the same period, household gas (61) IPTO Monthly Energy Report, January 2023
prices increased above the EU average, but more

44
energy markets could be strengthened by number of key sectors. Hydrogen is considered
increasing the use of renewables and making an important field and promising solution in
available storage and demand response Greece, but is currently in the early stages of
programmes for market participants. Such development. The government has unveiled the
measures would have a positive impact on National Strategy for Hydrogen and Other
households and businesses. Indeed, Greece has Renewable Gases. On its implementation, the
already introduced demand response in its project involving technical support for the
wholesale market implementation of the National Hydrogen Strategy
was launched in early 2023. The strategy will also
In recent years, Greece has taken important help promote the deployment of biomethane in
steps to support the deployment of Greece.
renewable energy. Renewables consumption in
Greece reached 21.9% in 2021, compared to On energy efficiency, Greece has been
21.7% in 2020 and 19.6% in 2019 (62). In 2022, it successfully using the Recovery and
is estimated that Greece had almost 1.7 GW of Resilience Facility to fund the expansion of a
new installed RES capacity driven primarily by the large-scale programme to make residential
installation of an additional 1.3 GW of solar buildings more energy-efficient. In the
energy and 230 MW of onshore wind (63). Greece’s meantime, Greece is working on a similar
recovery and resilience plan includes the programme for public buildings as well as the
installation of 3GW of new renewable energy wider introduction of energy services and the
(wind and solar) by the end of 2025 and the successful continuation of the Greek Energy
installation of storage systems (1380MW) to Efficiency Obligation Scheme (65). However,
facilitate the integration of new renewable energy mobilization of additional private funds for energy
capacity. In 2022, Greece has taken steps to renovations, the continuation of actions that will
streamline the licensing framework for renewable mitigate energy poverty and the creation of a
energy, but further streamlining of the permitting functioning market for energy services remain
procedures as well as clear remuneration system among the challenges that Greece should tackle.
for storage are needed in order to further facilitate Regarding market surveillance activities, Greece is
the RES deployment. Greece also recently adopted carrying out a low number of checks on products
a law laying down, for the first time, the legal covered by ecodesing and energy labelling. This
framework for the development of offshore wind generates concerns with respect to the
farms as well as to establishing a framework for enforcement of market surveillance obligations
Guarantees of Origin. In addition, Greece has and the compliance levels of the concerned
adopted some measures to support the products, and therefore missed energy and CO2
deployment of smaller-scale RES-E systems in savings (66).
homes and communities. For example, net
metering support schemes have been put in place Greece is one of the Member States that has
for prosumers (64). Greece shows potential for increased its innovation performance the
becoming a strong market for the use of PPAs and most in 2015-2021, from 48.7/100 to 56.2/100,
will need to take regulatory and market measures above the EU average rate of improvement during
in order to support their use. The electricity the same period. Still, the total R&I expenditure
interconnection of the Cyclades and the necessary was 0.94% of the GDP in 2020 which is below the
upgrade of the overall electricity network will EU average of 2.19% (67). Concerning the quality
further facilitate the penetration of renewables in of the scientific production in the clean energy
the Greek electricity mix. technology sector (CET), Greece, with 17%, comes
fourth within the EU countries (EU average 12%)
In order for Greece to achieve its climate and one of the four (Luxembourg, Denmark, the
targets and in line with the REPowerEU Plan,
there is still room for further expansion in a
(65) https://ypen.gov.gr/energeia/energeiaki-exoikonomisi/metra-
politikis/kathestota/
(62) Eurostat – SHARES.
(66) The internet-supported information and communication
(63) IRENA, Renewable capacity statistics 2023 system for the pan-European market surveillance.
(64) COM (2022) 639 final. (67) European Innovation Scoreboard 2021

45
Netherlands and Greece) ranking amongst the top
10 global in 2018. The average of scientific
publications related to CETs in Greece in the period
2015–2020 was 847 (EU27 30.160). Greece’s
share of highly cited publications in the total of
publications related to clean energy technologies
was 18, 65% in 2018 (EU27 13, 27%). The
average number of CET inventions per year the
period 2015-2018 was 7 (EU27 26.259).

The Recovery and Resilience Plan “Greece

2.0” dedicates 37, 5% of grants and loans to
green objectives. Overall, EUR 6.2 billion (3% of
2021 GDP) are budgeted for the green transition
which are expected to mobilize a total of EUR 11.6
billion (6% of 2021 GDP) (68). The estimated
exports of products related to CETs for Greece was
EUR 321 million (EU27 35.528 million) in 2019
with increasing trend since 2015. The Clean
Energy Innovation Index score for Greece was
0,326 (EU27 0,429) in 2018 (69). Venture capital
investments in climate tech start-ups and scale-
ups in Greece in 2020 was EUR 4,5 million, (0,8%
of EU27). Greece has experienced no growth of job
ads in energy supply sector, which is also relevant
for the clean energy deployment.

(68) OECD Economic survey Greece, January2023

(69) Tracking research and innovation performance in the clean

energy sector, European Commission, October 2022

46
Table A7.1: Selected indicators on energy mix
GREECE EU
2018 2019 2020 2021 2018 2019 2020 2021
Import Dependency [%] 71% 74% 81% 74% 58% 61% 57% 56%
ENERGY DEPENDENCE

of Solid fossil fuels 5% 6% 10% 10% 44% 44% 36% 37%

of Oil and petroleum products 98% 96% 106% 93% 95% 97% 97% 92%
of Natural Gas 101% 99% 101% 99% 83% 90% 84% 83%
Dependency from Russian Fossil Fuels [%]
of Hard Coal 89% 89% 87% 96% 40% 44% 49% 47%
of Crude Oil 11% 10% 18% 13% 30% 27% 26% 25%
of Natural Gas 66% 32% 39% 41% 40% 40% 38% 41%

2015 2016 2017 2018 2019 2020 2021 2022

Gross Electricity Production (GWh) 51,874 54,439 55,266 53,263 48,626 48,252 54,715 -
Combustible Fuels 37,203 39,798 41,698 37,412 32,880 31,055 33,020 -
Nuclear 0 0 0 0 0 0 0 -
ELECTRICITY

Hydro 6,150 5,565 4,040 5,760 4,051 3,440 5,961 -

Wind 4,621 5,146 5,537 6,300 7,266 9,310 10,483 -
Solar 3,900 3,930 3,991 3,791 4,429 4,447 5,251 -
Geothermal 0 0 0 0 0 0 0 -
Other Sources 0 0 0 0 0 0 0 -
Net Imports of Electricity (GWh) 9,608 8,796 6,237 6,278 9,944 8,864 3,684 -
As a % of electricity available for final consumption 18% 16% 11% 12% 19% 18% 7% -
Electricity Interconnection (%) - - 10.60% 9.70% 9.8% 9.9% 6.3% 6.3%

2015 2016 2017 2018 2019 2020 2021 2022

Gas Consumption (in bcm) 3.2 4.1 4.9 4.9 5.3 5.8 6.5 5.6
Gas Imports - by type (in bcm) 3.8 4.9 6.4 5.9 8.0 8.9 8.7 -
Gas imports - pipeline 3.2 4.1 5.0 4.9 5.2 5.9 6.4 -
DIVERSIFICATION OF GAS SUPPLIES

Gas imports - LNG 0.6 0.8 1.5 1.0 2.8 3.0 2.2 -
Gas Imports - by main source supplier (in bcm) (1) -
Russia 1.9 2.6 2.9 3.2 1.7 2.3 2.6 -
United States 0.0 0.0 0.0 0.2 0.5 3.0 2.3 -
Azerbaijan 0.0 0.0 0.0 0.0 0.0 0.0 1.2 -
Algeria 0.7 1.4 2.5 1.7 1.1 0.5 1.0 -
Others 1.1 0.8 1.1 0.8 4.8 3.1 1.6 -

2019 2020 2021 2022

LNG Terminals
Number of LNG Terminals (2) 1 1 1 1
LNG Storage capacity (m3 LNG) 225,000 225,000 225,000 225,000
Underground Storage
Number of storage facilities 0 0 0 0
Operational Storage Capacity (bcm) 0 0 0 0

2019 2020 2021 2022

VC investments in climate tech start-ups and scale-ups
0.1 4.5 0.0 n.a.
CLEAN ENERGY

(EUR Mln) (3)

as a % of total VC investments in Greece 0.1% 0.8% 0.0% n.a.
Research & Innovation spending in Energy Union R&i
priorites
Public R&I (EUR mln) 102.1 84.9 n.a. n.a.
Public R&I (EUR mln) 0.008% 0.007% n.a. n.a.
Private R&I (EUR mln) 329.8 n.a. n.a. n.a.
Private R&I (% GDP) 0.03% n.a. n.a. n.a.

(1) The ranking of the main supliers is based on the latest available figures (for 2021)
(2) includes FSRU
(3) Venture Capital investments include Venture Capital deals (all stages) and Private Equity Growth/Expansion
deals (for companies that have previously been part of the portfolio of a VC investment firm).

Sources: Eurostat, Gas Infrastructure Europe (Storage and LNG Transparency Platform), JRC SETIS (2022), JRC elaboration based
on PitchBook data (06/2022)

47
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY
This Annex monitors Greece’s progress in (latest available data), though this was still well
ensuring a fair transition towards climate below the EU average for that year. In 2022, 63%
neutrality and environmental sustainability, of Greek citizens believed they lacked the
notably for workers and households in necessary skills to contribute to the green
vulnerable situations. The number of jobs in the transition (vs 38% on average in the EU) (72) (see
green economy has risen, but further efforts are Annex 14 and 15). In this context, the Just
needed to support this trend. The provision of skills Transition programme for Greece (worth EUR 1.63
relevant for the green transition will contribute to billion) will devote 20.4% of its funding to
the effective implementation of REPowerEU in upskilling and reskilling for workers in regions
Greece, also in line with the Council most affected by the transition, in synergy with an
Recommendation. (70) Greece’s recovery and enhanced offer of training at a national level,
resilience plan (RRP) outlines crucial reforms and including in-work training envisaged in the RRP. In
investment for a fair green transition, Greece, 6.2% of ESF+ funding helps promote
complementing the territorial just transition plans green skills and jobs, as well as create
and actions by the European Social Fund Plus employment opportunities for the workers
(ESF+). affected by the green transition.

Employment in Greece’s sectors most Graph A8.1: Fair transition challenges in Greece
affected by the green transition presents EU Latest EL Latest (vs EU Latest) EL 2015 (vs EU Latest)

challenges, while workers in declining

GHG per worker
activities need active support. The greenhouse 4.5
4

gas (GHG) emissions intensity of Greece’s

3.5
3
Carbon 2.5 Employment EII
workforce declined from 20.8 to 16.1 tonnes per inequality 2
1.5

worker between 2015 and 2021, but it is still 1

0.5

above the EU average of 13.7 tonnes in 2021 (see

0

Graph A8.1 and Table A8.1). Employment in Transport

Education &
poverty
Greece’s energy-intensive industries (EII) reached (proxy)
training EII

1.2% of total employment in 2021 (1.1% in 2020,

compared to 3.0% on average in the EU) and Energy poverty

remained broadly stable compared to 2015

(1.1%). Employment in mining and quarrying Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ projects and
World Inequality Database (see Table A8.1).
decreased by 4.1% since 2015 (to around 10 000
workers). The job vacancy rate in construction, a
key sector for delivering on the green transition, is The spike in energy prices can worsen the
higher than the EU average (6.7% v 4.0% in the progress achieved by Greece in recent years.
EU in 2022) (71). Following the strong labour The share of the total population unable to keep
market changes, there is a need to provide their homes adequately warm declined from
targeted employment support based on the 29.2% in 2015 to 17.1% in 2020, but it increased
individual needs of each stakeholder and in line slightly to 17.5% in 2021 (still above EU average
with the transition plans and labour market needs. of 6.9%) (73). The share of the population at risk of
poverty (AROP) unable to keep their homes
Upskilling and reskilling are key for adequately warm decreased from 50.9% in 2015
supporting jobs in transforming sectors and to 36.8% in 2021 (above the EU average at
ensuring a smooth and socially fair 16.4%). All income groups were affected in 2021,
transition. In the energy-intensive industries, including 30.9% of low-income households (in
deciles 1-4) (vs 13.4% in the EU). Before the
workers’ participation in education and training
increased from 3.5% in 2017 to 4.8% in 2018 energy price hikes, an estimated 26.7% of the
total population and 51.9% of the (expenditure-

(70) Council Recommendation of 16 June 2022 on ensuring a fair (72) Special Eurobarometer 527. Fairness perceptions of the
transition towards climate neutrality (2022/C 243/04) covers green transition (May – June 2022).
employment, skills, tax-benefit and social protection
systems, essential services, and housing. (73) Energy poverty is a multi-dimensional concept. The indicator
used focuses on an outcome of energy poverty. Further
(71) Eurostat (JVS_A_RATE_R2) indicators are available at the Energy Poverty Advisory Hub.

48
Table A8.1: Key indicators for a fair transition in Greece
Indicator Description EL 2015 EL Latest EU Latest
GHG per worker Greenhouse gas emissions per worker - CO2 equivalent tonnes 20.8 16.1 (2021) 13.7 (2021)
Employment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20),
Employment EII 1.1 1.1 (2020) 3 (2020)
minerals (C23), metals (C24), automotive (C29) - %
Education & training EII Adult participation in education and training (last 4 weeks) in energy-intensive industries - % 4.8 (2018) 10.4 (2022)
Energy poverty Share of the total population living in a household unable to keep its home adequately warm - % 29.2 17.5 (2021) 6.9 (2021)
Transport poverty (proxy) Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport - % 37 41.9 (2023) 37.1 (2023)
Carbon inequality Average emissions per capita of top 10% of emitters vs bottom 50% of emitters 4.6 4.3 (2020) 5 (2020)

Source: Eurostat (env_ac_ainah_r2, nama_10_a64_e, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-
JRC GD-AMEDI/AMEDI+ projects and World Inequality Database (WID).

based) AROP population had residential vs 55% in the EU) and quality (43 vs 60% in the
expenditure budget shares on electricity, gas, and EU). As regards these perceptions, rural areas in
other fuels (74) above 10% of their household Greece perform better than urban areas, and
budget (above the EU average of 26.9% and better in terms of affordability and quality when
48.2%, respectively). compared to rural areas in the EU overall. The
average carbon footprint of the top 10% of
The increased energy prices in 2021-2023 emitters is about 4.5 times higher than that of the
risk negatively affecting household incomes, bottom 50% (see Graph A8.1). The Greek region of
notably for low-income groups. As a result of Western Macedonia ranks among the worst
energy price changes during the August 2021 to performers in terms of air quality in the EU, which
January 2023 period relative to the 18 months calls for further efforts to protect citizens from air
prior (cf. Annex 7), in the absence of policy support pollution and reduce environmental inequalities,
and behavioural responses, the fraction of with a specific focus on the most vulnerable. In
individuals living in households spending more Greece, the average levels of air pollution in 2020
than 10% of their budget on energy would have stood above the EU average (14.5 vs 11.2 µg/m
increased by 22.2 pps for the whole population PM2.5), almost all regions exposed to critical levels
and by 26.5 pps among the (expenditure-based) of air pollution, (76) leading to significant health
AROP population, which constitute increases higher impacts, in particular on vulnerable groups, and
than average impacts in the EU (by 16.4 pps and 8 843 premature deaths annually. (77)
19.1 pps, respectively). (75) The shares of
expenditure of residential energy of low and
lower-middle income groups would have increased
the most, in particular for electricity compared to
the EU-wide effects (see Graph A8.2). Among the
(expenditure-based) AROP population, the share of
individuals living in households with budget shares
for private transport fuels (73) above 6% would
have increased less than the EU average (4.9 pps
vs 5.3 pps in the EU), reaching 41.9% in January
2023 (vs 37.1% in the EU) due to the increase in
transport fuel prices.

Access to public transport is perceived to be

greater in rural areas, while some regions
rank high in terms of air pollution. While
citizens perceive public transport to be relatively
affordable (51% vs 54% in the EU), Greece
performs worst on perceptions of availability (39%

(74) Products defined according to the European Classification of

Individual Consumption according to Purpose (ECOICOP):
CP045. (76) Two times higher than the recommendations in the WHO Air
Quality Guidelines (annual exposure of 5µg/m3)
(75) EMPL-JRC GD-AMEDI/AMEDI+ ; see details in the related
technical brief. (77) EEA- Air Quality Health Risk Assessment

49
Graph A8.2: Distributional impacts of energy prices
due to rising energy expenditure (2021-2023)
EL Gas EL Electricity EU Gas EU Electricity
4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%
Gas

Gas
Electricity

Gas

Electricity

Gas

Electricity

Electricity

Gas

Electricity

Gas

Electricity

Gas

Electricity

Gas

Electricity

Gas

Electricity

Electricity

Gas
D1 D2 D3 D4 D5 D6 D7 D8 D9 D10

Mean change of energy expenditure as a percentage (%) of

total expenditure per income decile (D) due to observed price
changes (August 2021 – January 2023 relative to the 18
months prior), excl. policy support and behavioural responses.
Source: EMPL-JRC GD-AMEDI/AMEDI+ projects, based on
Household Budget Survey 2015 and Eurostat inflation data
for CP0451 and CP0452.

50
PRODUCTIVITY
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY
The circular economy transition is key to responsible for the rational management of water
delivering on the EU’s climate and resources.
environmental goals and provides large
socio-economic benefits. It spurs job growth, Graph A9.1: Trend in material use
innovation and competitiveness and fosters 16.0 160.0
resilience and resource security. The circularity 14.0 140.0
transition of industry, the built environment and
12.0 120.0
agri-food can generate significant environmental
10.0 100.0
improvements (see Annex 6), as they rank among

tonnes/capita

kg/capita
the most resource-intensive systems. 8.0 80.0

6.0 60.0

Greece’s circular economy transition is 4.0 40.0

insufficient and needs accelerating to meet 2.0 20.0
the EU’s circular economy goals. The EU’s new 0.0 0.0
circular economy action plan (CEAP) aims at 2016 2017 2018 2019 2020 2021

doubling circular material use by 2030 vs 2020. Material footprint Greece (tonnes/capita)

Greece’s circular material use stood at 2.3% in Material footprint EU-27 (tonnes/capita)
Trade in recyclable raw materials Greece (imports extra EU, kg/capita)
2016 and at 3.4% in 2021, far below the EU Trade in recyclable raw materials EU-27 (imports extra EU, kg/capita)
average of 11.7% despite the increase in recent
years. The CEAP also aims to significantly Source: Eurostat
decrease the EU’s material footprint. Greece’s
material footprint (11.1%) was below the 2020 Graph A9.2: Treatment of municipal waste
EU-27 average (13.7%). The labour market
600 524
benefits of the circular transition remain limited, 498 504 515
with a decrease in terms of direct circular jobs
500
since 2016. As regards health and safety in
circular jobs, fatal accidents in waste management
400
and materials recovery are above the average of
Kg per capita

all economic sectors but below the EU average in

300
Greece (78).
200
Greece recently adopted new policies to
address circular economy challenges, but 100
more measures are needed. In November 2021
Greece approved its national circular economy 0
action plan (CEAP) for the implementation period 2016 2017 2018 2019 2020

2021-2025, with a corresponding roadmap Difference waste generated/treatment

Landfill/disposal
approved by the Council of Ministers. Greece’s new
Total incineration (including energy recovery)
national waste management plan (2020) and the Composting and digestion
regional waste management plans are currently Material recycling
under revision. The Greek RRP includes reforms EU-27
aiming at setting up a national waste regulatory Source: Eurostat; 2020 data unavailable
authority; reforming the regional and local waste
management bodies; introducing sound costing The treatment of municipal waste has been
and pricing policies in line with the ’pay as you progressing at a slow pace since 2016. Greece
throw’ and ’polluter pays’ principles; and missed the EU target for recycling 50% of
establishing a Water Regulatory Authority, municipal waste by 2020. Greece is at risk of
missing the 2025 recycling targets both for
municipal and for packaging waste. 77.7% of
(78) Eurostat [HSW_N2_02] for NACE Rev. 2 sector E38; 2.88 Greece’s municipal waste was still landfilled in
fatal accidents p. 100 000 employed in 2018-2020 vs 0.92 2019, significantly more than the EU average
for all sectors in EL; 6.33 in the EU-27 for sector E38

51
(23% in 2019). Illegal or sub-standard landfilling of building new ones, as well as increasing the
is still widespread. share of secondary raw materials in construction.

The industrial system is increasingly circular. The agri-food system has yet to design out
The economy, particularly industry, is close to food waste and efficiently manage water
reaching the EU average with a resource resources. Greece’s composting and anaerobic
productivity of 2.1 purchasing power standard per digestion per head has increased since 2016 but
kilogramme vs 2.3 for the EU, steadily increasing remained well below the EU average in 2019 (last
Greece’s resilience (see Annex 5). There is still data available) at 26 kg per head vs 100 kg for
significant potential to boost repair, reuse and the the EU-27 in 2021. Several initiatives of the
use of secondary raw materials, particularly taking national CEAP are being implemented to advance
into account that Greece’s recyclable material circularity at the national level, such as drafting a
import dependency is almost twice as high as the food-waste prevention programme as part of the
EU average (43.4 vs 22.9 in 2021). Existing 2030 national waste prevention programme.
policies provide positive examples and need to be
scaled up. The new national circular economy There remains a financing gap in the circular
action plan aims at increasing the environmental economy, including waste management.
performance of industrial processes and industrial Additional investments will be required to
symbiosis. Legislative measures have been address growing needs. The financing gap was
introduced to promote the circularity of products, estimated at EUR 472 million per year between
especially plastics (Laws 4736/2020 and 2014 and 2020. Over this period, investment
4819/2021). needs were estimated to be at least EUR 977
million per year, while investment baselines were
The built environment system continues to EUR 505 million per year (see Annex 6). Greece is
exacerbate the depletion of resources already using funds from the ERDF, but further
despite recent improvements. The recovery investments are needed, including from the
rate of construction and demolition waste has national budget. The new waste management law
increased since 2016 and is above the EU average provides for the introduction of a landfill tax, the
(100% vs 89%). While Greece’s recovery and proceeds of which will be used for recycling
resilience plan focuses on energy efficiency in projects, but the enforcement of the tax faces
residential buildings, there is scope for renovating delays and its implementation is at risk.
existing buildings and improving their use instead

Table A9.1: Overall and systemic indicators on circularity

Latest year
AREA 2016 2017 2018 2019 2020 2021 EU-27 EU-27
Overall state of the circular economy
Material footprint (tonnes/capita) 13.0 13.1 12.1 12.3 11.1 - 13.7 2020
1
YoY growth in persons employed in the circular economy (%) 12.7 -6.0 4.2 -2.0 - - 2.9 2019
Water exploitation index plus (WEI+) (%) 14.8 19.6 11.8 13.3 - - 3.6 2019

Industry
Resource productivity (purchasing power standard (PPS) per kilogram) 1.5 1.6 1.6 1.8 1.9 2.1 2.3 2021
2
Circular material use rate (%) 2.3 2.8 3.3 4.1 4.4 3.4 11.7 2021
Recycling rate (% of municipal waste) 17.2 18.9 20.1 21.0 - - 49.6 2021

Built environment
3
Recovery rate from construction and demolition waste (%) 88.0 - 97.0 - 100.0 - 89.0 2020
4
Soil sealing index (base year = 2006) 103.7 - 109.5 - - - 108.3 2018

Agri-food
5
Food waste (kg per capita) - - - - 191.0 - 131.0 2020
Composting and digestion (kg per capita) 17.0 21.0 26.0 26.0 - - 100.0 2021
(1) Persons employed in the circular economy only tracks direct jobs in selected sub-sectors of NACE codes E, C, G and S; (2) the
circular material use rate measures the share of material recovered and fed back into the economy in overall material use; (3) the
recovery rate of construction and demolition waste includes waste which is prepared for reuse, recycled or subject to material
recovery, including through backfilling operations; (4) soil sealing: 2016 column refers to 2015 data; (5) food waste includes
primary production, processing and manufacturing, retail and distribution, restaurants and food services, and households.
Source: Eurostat, European Environment Agency

52
ANNEX 10: DIGITAL TRANSFORMATION
Digital transformation is key to ensuring a close to the EU average. The share of individuals
resilient and competitive economy. In line with employed as ICT specialists remains very low
the Digital Decade Policy Programme, and in compared to the EU average, but the proportion of
particular with the targets in that Programme for women among ICT specialists is above the EU
digital transformation by 2030, this Annex average. Greece has begun implementing RRP
describes Greece’s performance on digital skills, measures that are expected to help develop digital
digital infrastructure/connectivity and the skills in the labour force; for example, a first wave
digitalisation of businesses and public services. of digital and green upskilling programmes was
Where relevant, it makes reference to progress on launched in July 2022.
implementing the Recovery and Resilience Plan
(RRP). Greece allocates 23% of its total RRP In digital infrastructure/connectivity, fixed
budget to digital (EUR 7.1 billion) (79). very high capacity network (VHCN) coverage
continue to grow. But despite significant
The Digital Decade Policy Programme sets progress, the percentage of households covered by
out a pathway for Europe’s successful digital VHCNs in 2022 remains low compared to the EU
transformation by 2030. The Programme average. By contrast, overall 5G coverage exceeds
provides a framework for assessing the EU’s and the EU average showing a substantial increase
Member States’ digital transformation, notably via since 2021. On 5G coverage on the 3.4-3.8 GHz
the Digital Economy and Society Index (DESI). It spectrum band, essential for enabling advanced
also provides a way for the EU and its Member applications requiring large spectrum bandwidth,
States to work together, including via multi- Greece scores slightly below the EU average.
country projects, to accelerate progress towards Greece is a frontrunner in making available the 5G
the Digital Decade digital targets and general pioneer bands, with a very high score (99%) in this
objectives (80). More generally, several aspects of indicator (EU average 56%).
digital transformation are particularly relevant in
the current context. In 2023, the European Year of Digital technologies are slowly being
Skills, building the appropriate skillset to make full integrated into business activities. Only 41%
use of the opportunities that digital transformation of SMEs have a basic level of digital intensity, still
offers is a priority. A digitally skilled population far from the EU average. On the adoption of
increases the development and adoption of digital advanced digital technologies, enterprises in
technologies and leads to productivity gains (81). Greece are almost at the EU average for the
Digital technologies, infrastructure and tools all adoption of big data, though they are below the
play a role in the fundamental transformation EU average for the use of cloud computing
needed to adapt the energy system to the current services and artificial intelligence. Under the RRP,
structural challenges (82). in 2022, Greece launched two projects which are
expected to contribute to the digital transition of
Stepping up work to develop digital skills businesses: one on the digital transformation of
remains a priority for Greece. Just over half of businesses and one to accelerate smart
the population has at least basic digital skills, very manufacturing by SMEs.

Greece continues to show a strong

(79) The share of financial allocations that contribute to digital
objectives has been calculated using Annex VII of the RRF commitment to the digital transformation of
Regulation. its public services and has made substantial
(80) The Digital Decade targets as measured by DESI indicators progress in moving public services online.
and complementary data sources are integrated to the However, the results are not yet fully reflected in
extent currently available and/or considered particularly the indicators on digital public services for
relevant in the MS-specific context.
businesses and for citizens, which remain below
(81) See for example OECD (2019): OECD Economic Outlook, the EU average, partially because of a still limited
Digitalisation and productivity: A story of complementarities, number of cross-border services available
OECD Economic Outlook, Volume 2019 Issue 1 | OECD
iLibrary (oecd-ilibrary.org). compared to other Member States. In 2022, the
percentage of e-Government users in Greece is
(82) The need and possible actions for a digitalisation of the
energy system are laid out in the Communication higher than the EU average (81% vs 74%). In July
‘Digitalisation the energy system – EU action plan’ 2022 a new application, Gov.gr Wallet, was
(COM(2022)552. launched, allowing digital documents (e.g. national
identity cards, driving licences and disability cards)

53
to be fully equivalent to paper documents for any
legal use within the Greek territory, but not cross-
border. Greece has not yet notified an electronic
identification (eID) scheme under the eIDAS
Regulation. In terms of access to electronic health
records, Greece scores below the EU average in
the composite indicator. In 2022, a mobile
application, Myhealth, has been released, but
although 80-100% of citizens can already access
the online service to their health data, the scope of
data accessible is somewhat limited.

Table A10.1: Key Digital Decade targets monitored by DESI indicators

Digital Decade
Greece EU target by 2030
DESI 2021 DESI 2022 DESI 2023 DESI 2023 (EU)
Digital skills
At least basic digital skills NA 52% 52% 54% 80%
% individuals 2021 2021 2021 2030
ICT specialists (1) 2.1% 2.4% 2.4% 4.5% 20 million
% individuals in employment aged 15-74 2020 2021 2021 2021 2030
Digital infrastructure/connectivity
Fixed Very High Capacity Network (VHCN) coverage 10% 20% 28% 73% 100%
% households 2020 2021 2022 2022 2030
Fibre to the Premises (FTTP) coverage (2) 10% 20% 28% 56% -
% households 2020 2021 2022 2022 2030
Overall 5G coverage 0% 66% 86% 81% 100%
% populated areas 2020 2021 2022 2022 2030
5G coverage on the 3.4-3.8 GHz spectrum band NA NA 37% 41% -
% populated areas 2022 2022 2030
Digitalisation of businesses
SMEs with at least a basic level of digital intensity NA NA 41% 69% 90%
% SMEs 2022 2022 2030
3
Big data ( ) 13% 13% 13% 14% 75%
% enterprises 2020 2020 2020 2020 2030
Cloud (3) NA 15% 15% 34% 75%
% enterprises 2021 2021 2021 2030
Artificial Intelligence (3) NA 3% 3% 8% 75%
% enterprises 2021 2021 2021 2030
Digitalisation of public services
Digital public services for citizens NA 52 65 77 100
Score (0 to 100) 2021 2022 2022 2030
Digital public services for businesses NA 48 74 84 100
Score (0 to 100) 2021 2022 2022 2030
Access to e-health records NA NA 60 71 100
Score (0 to 100) 2023 2023 2030

(1) The 20 million target represents about 10% of total employment.

(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and
taken into consideration when interpreting VHCN coverage data in the Digital Decade.
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud
computing services; (ii) big data; (iii) artificial intelligence.

Source: Digital Economy and Society Index

54
ANNEX 11: INNOVATION
This Annex provides a general overview of the sustainability of these investments is a key
performance of Greece’s research and innovation challenge (86).
system, which is essential for delivering the twin
green and digital transition. Improvements in a number of areas would
help the Greek economy to fulfil its
Greece is a ‘moderate innovation performer’ technological and innovation potential. Greek
with continuous performance improvement firms have tended to gravitate towards low-
and a clear upward trend. According to the knowledge-intensive activities and to have limited
2022 edition of the European Innovation capacity to absorb innovative and techonological
Scoreboard (83), the country’s overall performance advances. These are the main factors that have
is slightly better than in 2021. It is still below the hampered or severely limited demand for
EU average (89.7%), but the gap is shrinking. specialised knowledge (87). Greek small and
medium-sized enterprises’ (SMEs’) expenditure on
Graph A11.1: Innovation performance 2015-2022 R&D (BERD) as a percentage of GDP (0.26% for
2020) is somewhat below the EU average (0.34%).
107 Venture capital availability (0.021%) is also on the
102
low side and below the EU average (0.074% in
2021). This is also reflected in terms of innovation
97
92
87 outputs, with 0.6 patent applications per billion
82 GDP compared to the EU average of 3.5 (for
77
2019), pointing to weaknesses with
72
67
commercialisation. The RRP includes investment to
62 address innovation uptake, for example by
2015 2016 2017 2018 2019 2020 2021 2022
supporting applied research projects and SMEs
awarded with the Horizon 2020 ‘Seal of
EU EL

Source: European Innovation Scoreboard, 2022 Excellence’ quality label.

R&D intensity (84) was 1.45% in 2021, Cooperation between public research bodies
significantly below the European average and the private sector is insufficient to
(2.26%) (85). A major driver behind the upward effectively support knowledge and
trend in R&D intensity in recent years (9.5% technology transfer. The number of public-
compound annual growth rate from 2010 to private scientific co-publications as a percentage
2020), has been the strong increases in public of total publications was, at 8.1%, above the EU
R&D expenditure (0.76% of GDP in 2021, which is average (7.1%) in 2021, but still ranks Greece 17th
also the EU average). However, while R&D amongst Member States. Also, public expenditure
accounts for an increasing share of private on R&D financed by business enterprise (5.12% of
investment, its share continues to lag markedly total public expenditure of R&D in 2020) is lagging
behind the EU average (0.69%, compared to the behind the EU average (7.45%). In the 2014-2020
EU average of 1.49% in 2021). The Greek recovery programming period, the cohesion policy invested
and resilience plan (RRP) aims to increase public EUR 606.5 million under the ‘research-create-
and private research and innovation (R&I) innovate’ scheme, aimed at strengthening the link
investment through, for example, investment in between the public science sector and businesses.
research centre infrastructure and in basic and In the 2021-2027 programming period, this
applied research. However, ensuring the long-term scheme will continue, with an expected investment
of some EUR 376 million, complemented by
investment from the RRP.
(83) 2022 European Innovation Scoreboard, Country profile:
Greece https://ec.europa.eu/assets/rtd/eis/2022/ec_rtd_eis-
country-profile-el.pdf. The EIS provides a comparative
analysis of innovation performance in EU countries, including
the relative strengths and weaknesses of their national (86) Particularly considering that total Recovery and Resilience
innovation systems (also compared to the EU average). Facility funding for R&I amounted to 93% of Greece’s public
R&D expenditure in 2020.
(84) Defined as gross domestic expenditure on R&D as a
percentage of GDP (87)
http://www.gsrt.gr/Financing/Files/ProPeFiles15/Final_St
(85) European benchmark target for R&D intensity: 3%. udy_InnoBarriers_September_2020.pdf.

55
Strong regional inequalities in research Investment under the RRP supports higher R&I
performance affect the diffusion of uptake, but addressing the regional disparity
innovation. The distribution of national R&D remains a key challenge. To this end, the cohesion
expenditure across the Greek regions is uneven, policy will assist Greece to redress the main
with a high concentration in Attiki, which accounts regional imbalances, prioritising investment in
for 61.1% of spending. This is much higher than sectors with regional competitive advantages,
the second-highest region, Kentriki Makedonia, identified in the process of entrepreneurial
with 12.1% of national expenditure. Most of the discovery (EDP) in every region.
remaining 11 regions have shares below 4% (88).
Institutions from Attiki also account for the biggest
proportion of scientific publications in each region
and in the country as a whole (53.1% of the total),
followed by institutions based in Kentriki
Makedonia (22.0%).

Table A11.1: Key innovation indicators

EU
Greece 2010 2015 2019 2020 2021
average (1)
Key indicators
R&D intensity (GERD as % of GDP) 0.60 0. 97 1.28 1.51 1.45 2.26
Public expenditure on R&D as % of GDP 0.36 0.64 0.68 0.80 0.76 0.76
Business enterprise expenditure on R&D (BERD) as % of GDP 0.24 0.32 0.59 0.70 0.69 1.49
Business enterprise expenditure on R&D (BERD) performed
by SMEs as % of GDP : 0.11 0.21 0.26 : 0.34
Quality of the R&I system
Scientific publications of the country within the top 10%
most cited publications worldwide as % of total publications 8.5 9.0 8.9 : : 9.8
of the country
Patent Cooperation Treaty patent applications per billion
0.4 0.5 0.6 : : 3.5
GDP (in PPS)
Academia-business cooperation
Public-private scientific co-publications as % of total
5.3 7.0 8.4 8.5 8.1 7.1
publications
Public expenditure on R&D financed by business enterprise
: 0.040 0.041 0.041 : 0.054
(national) as % of GDP

Public expenditure on R&D financed by business enterprise

: 6.26 6.0 5.12 : 7.45
(national) as % of total public expenditure on R&D
Human capital and skills availability
New graduates in science & engineering per thousand pop.
10.9 13.4 14.4 14.2 : 16.0
aged 25-34
Public support for business enterprise expenditure on R&D (BERD)
Total public sector support for BERD as % of GDP : 0.049 0.085 : : 0.194
R&D tax incentives: foregone revenues as % of GDP 0.003 0.005 0.008 : : 0.100
Green innovation

Share of environment-related patents in total patent

20.3 11.2 8.1 : : 13.3
applications filed under the Patent Cooperation Treaty (%)
Finance for innovation and economic renewal
Venture capital (market statistics) as % of GDP 0.008 0.010 0.013 0.015 0.021 0.074
Employment in fast-growing enterprises in 50% most
5.7 5.7 7.5 : : 5.5
(innovative
88
) https://metrics.ekt.gr/sites/metrics-ekt/files/ekdoseis-
sectors
(1) EUpdf/2022/RDIGreekRegions_2021_el.pdf.
average for the latest available year or the year with the highest number of country data
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe

56
ANNEX 12: INDUSTRY AND SINGLE MARKET
Greece’s labour productivity recovered faster 13.7% in 2022, but still remains the lowest in the
than EU average, but productivity remains EU. Net public investment is less affected, in part
one of the lowest of the EU. GDP growth was due to the implementation of investments under
of 8.4% in 2021 against 5.4% for the EU (89) and the recovery and resilience plan (RRP). (See graph
is estimated to have increased by 5.9% in 2022 A12.3).
(compared to 3.5% for the EU). Performance
varied at sectoral level, with construction Graph A12.2: Labour productivity by sectors
exhibiting the strongest rebound between 2021 130
and 2022, whilst industry productivity declined
120
over the said period, as shown in graph A12.2.
However, despite the high percentage of the Greek 110

population with a tertiary education level (90),

2015 = 100
100
Greece’s productivity still only makes up 68.6% of
EU average, placing the country on the lower half 90

of performers (see graph A12.1). Ineffective labour 80

market regulation, labour skills mismatches (see
70
annex 14), low government effectiveness (91) and,
an insufficient level of digitalisation in both public 60
2015 2016 2017 2018 2019 2020 2021 2022
administration and businesses negatively weigh on Industry (exc. Construction)
labour productivity (see annexes 10 and 13). Manufacturing
Construction
Wholesale & retail trade
Info & comm
Graph A12.1: Labour productivity, whole economy Financial and insurance activities
Profess., adm. & support serv.

Source: Eurostat

110 Greece’s energy mix is still dependent on

fossil fuels (82% in 2022) (93), but
development of renewable energy resources
2008=100

is above average. Following the war in Ukraine,

and the energy crisis, postponment of the lignite
90
withdrawal plan was allowed in order to help the
energy intensive industries face the huge
increases in gas prices and its possible scarcity.
While the potential of renewables in Greece is
important, investment in R&D, still weak (Table
70
A11.1), appears as a crucial element to boost the
08Q4

09Q4

10Q4

11Q4

12Q4

13Q4

14Q4

15Q4

16Q4

17Q4

18Q4

19Q4

20Q4

21Q4

22Q4

decarbonisation of industry. (See annexes 6 and

EL IT FR PT EA19 7). 37.5% of the RRP is dedicated to measures
Source: European Commission, AMECO
supporting climate objectives.

Greece could further benefit from the

The increase in industry products’ prices (92)
advantages of the Single Market. Greece is
induced by the supply chain disruptions and
one of the EU countries that is least integrated
rises in energy prices is impacting net into the Single Market, with average intra-EU
investment. Greece’s investment-to-GDP reached imports and average intra-EU exports representing
only 22.7% of GDP in 2021 (against an EU
(89) EC Spring 2023 forecast average of 45.8%). The Single Market Scoreboard
indicates scope for improvement (94). The capacity
(90) Population by educational attainment level, sex and NUTS 2
regions (%) [EDAT_LFSE_04__custom_4425865] of the Greek public administration to apply EU
(91) Greece ranks 55th in the latest IMD report 2022 regarding
government efficiency.
(93) Total energy supply by sources, IEA
(92) Producer prices in industry, total - monthly data
[STS_INPP_M__custom_4422681] (94) Single Market Scoreboard 2022.

57
rules on the Single Market could be improved by most relevant source of financing. Greece made
staffing the national SOLVIT centre sufficiently. substantial use of the temporary state aid
framework during COVID-19. (97) . Some Reforms
Greece is making significant efforts to under the RRP aim at facilitating access to finance,
improve the public procurement system, but measurements of their impact are yet to
though these have yet to bear fruit. Greece come, (see also annex 18).
continues to underperform in public procurement
compared to EU peers. In 2022, 85% of public Graph A12.3: Business and productivity drivers
procurement procedures were awarded based on
the cheapest available offer and Greece had the
longest award decision-making period in the EU. 1) Business
investments
Also, the number of single-bid procedures remains
high and increased in recent years (48% of 5) Single bids
2) EIF access to
contracts awarded in 2022, vs 40% in 2021). finance index

Further efforts to increase competition and

improve data quality would benefit EU-funded
projects and public investment budget. Greece is 4) Labour
shortage
3) Payment gap
- G2B
expected to benefit from relevant RRP investment
and reforms, including the professionalisation of
4) Material 3) Payment gap
staff involved in public contracts, improvements in shortage - B2B
the digital tools for public procurement processes
and the implementation of a recently adopted new
national public procurement strategy.
European Union Greece
The Greek regulatory environment can be
Source: 1) % of GDP, 2021 Eurostat;
further improved to facilitate business 2) composite indicator, 2021 European Investment Fund
activity. While the requirements for setting up a access to finance index;
business are among the least-stringent in 3) average payment delay in number of days, 2022 Intrum;
4) % of firms in manufacturing facing constraints, 2022
Europe (95), the subsequent regulations and market European Commission business consumer survey;
barriers make it difficult for Greek firms to 5) proportion of contracts awarded with a single bidder, 2022
develop and expand. 58.4% of firms report Single Market Scoreboard.
business regulation as major obstacle, which is
well above the EU average (28%). Greek The persistence of late payments weighs
legislation is drafted in a complex way and there is negatively on business liquidity. In 2021, 52%
no online provision of consolidated legislation for of Greek companies declared that they
the citizens. Legislation planning, however, is now experienced problems due to late payments from
published on a yearly basis (see annex 13). Having private or public bodies in the past six months,
said that, Greece has recently adopted legislation versus the EU average of 43% (98).
to incentivise business scale-ups in the framework
of the RRP, and plans to further reform licensing Access to and exercise of certain regulated
legislation for economic activities. professions is still restricted, which may be
detrimental to a dynamic business
Access to finance remains difficult for
environment. Specifically, architects, civil
businesses, in particular small- and medium-
engineers, patent agents, tourist guides, lawyers
sized enterprises (SMEs). Both EIF loan and and accountants are more regulated than the EU
equity access to finance indexes for Greece are average (99). Lawyers in Greece are subject to
well below EU average (see table below). For 24% restrictions concerning the legal form of their
of SMEs, their loan was refused or rejected (well
above EU average) while for 57% of the SMEs
surveyed (96), grants or subsided loans are the (97) https://competition-policy.ec.europa.eu/state-
aid/coronavirus/temporary-framework_en
(95) OECD, 2018 Product Market Regulation Country Note : (98) Data and surveys - SAFE (europa.eu)
Greece by OECD - Issuu
(99) Communication on updating the reform recommendations
( ) SAFE survey
96 for regulation in professional services, COM(2021)385.

58
Table A12.1: Industry and the Single Market
EU27
POLICY AREA INDICATOR NAME 2018 2019 2020 2021 2022
average (*)
Net private investment, level of private capital stock, net of
HEADLINE INDICATORS

-3.7 -2.9 -3.2 -1.3 -0.1 3.7

depreciation, % GDP (1)
Economic
Net public investment, level of public capital stock, net of
Structure -0.5 -1.1 -0.8 0 0.3 0.4
depreciation, % GDP (1)
Real labour productivity per person in industry (% yoy)(2) -1.9 -0.2 3.7 8.9 -2.8 1.4
Cost
competitive- Nominal unit labour cost in industry (% yoy)(2) -2.6 2.5 -5.5 -5.4 5.4 2.9
ness
Material shortage (industry), firms facing constraints, % (3) 8 6 5 9 12 47
Labour shortage using survey data (industry), firms facing
Shortages 2 4 4 6 9 28
constraints, % (3)
RESILIENCE

Vacancy rate (business economy)(4) 0.8 0.7 0.4 0.7 1.3 3.1
Concentration in selected raw materials, Import concentration
0.13 0.13 0.13 0.13 0.12 0.18
Strategic index based on a basket of critical raw materials (5)
dependencies
Installed renewables electricity capacity, % of total electricity
47 49.4 53.5 61.3 n.a. 50.8
produced (6)
Single Market
EU trade integration, % (7) 17.4 17.8 16.4 20.2 22.7 45.8
MARKET

integration
SINGLE

Restrictions EEA Services Trade Restrictiveness Index (8) 0.05 0.05 0.05 0.05 0.05 0.05
Public
Single bids, % of total contractors (9) 33 40 42 40 48 29
procurement
Investment Impact of regulation on long-term investment, % of firms
78.7 86.3 59.3 58.4 70.6 29.6
obstacles reporting business regulation as major obstacle (10)
Business Bankruptcies, Index (2015=100)(11) n.a. n.a. n.a. n.a. n.a. 86.8
BUSINESS ENVIRONMENT - SMEs

demography Business registrations, Index (2015=100) (11) n.a. n.a. n.a. n.a. n.a. 121.2
Payment gap - corporates B2B, difference in days between
-1 19 17 13 13 13
offered and actual payment (12)
Payment gap - public sector, difference in days between
Late payments 8 35 16 12 13 15
offered and actual payment (12)
Share of SMEs experiencing late payments in past 6 months, %
(13) n.a. 62 63.6 54.9 52.3 43

EIF Access to finance index - Loan, Composite: SME external

0.24 0.21 0.2 0.13 n.a. 0.46
financing over last 6 months, index values between 0 and 1 (14)
Access to
finance
EIF Access to finance index - Equity, Composite: VC/GDP,
0.25 0.08 0.09 0.12 n.a. 0.23
IPO/GDP, SMEs using equity, index values between 0 and 1 (14)

(*) last available year

Source: (1) AMECO, (2) Eurostat, (3) ECFIN BCS, (4) Eurostat, (5) COMEXT and Commission calculations, (6) Eurostat, (7) Eurostat,
(8) OECD, (9) Single Market Scoreboard, (10) EIB survey, (11) Eurostat: (12) Intrum, (13) SAFE Survey, (14) EIF SME Access to
Finance Index.

business, whilst it is considered incompatible for a

lawyer to engage in certain other activities. This
could affect the potential of this sector to innovate
and roll out digital solutions and new business
models. As regards civil engineers, different
categories of activity exist and additional
authorisation is required to undertake public works
or studies. Such restrictions, impacts the efficiency
of service provision. A more proportional approach
to regulation for such professions would make the
respective sectors more competitive.

59
ANNEX 13: PUBLIC ADMINISTRATION
This Annex outlines the performance of assessments are carried out when primary laws
Greece’s public administration, which is are produced. Specific steps have been taken to
essential for providing services and carrying improve the capacity for ex post evaluations.
out reforms. Overall, Greece’s administrative Despite this progress, Greece is still below the EU
effectiveness ranks below the EU-27 average (100). average on stakeholder consultation and ex post
Greece has launched key reforms under its evaluation of both primary and secondary
recovery and resilience plan that are aimed at legislation (102). In general, the Greek Parliament
resolving long-standing issues, such as (i) adopts legislation quite rapidly following their
streamlining the allocation of responsibilities introduction to the Parliament. Unlike in other EU
between the different levels of government; (ii) countries, the COVID-19 pandemic led to no
introducing strategic workforce planning; (iii) increase in the use of urgent legislative procedures
modernising hiring procedures; (iv) reskilling and (Graph A13.1). Overall, some steps have been
upskilling the workforce in the public sector; (v) taken to improve the quality of law making,
introducing a reward system for public entities and including the establishment of a committee
civil servants. assessing the quality of draft bills before they are
tabled in Parliament. In addition, the new job
The Greek public administration has a good classification of “legal drafters” to be appointed in
age and higher education profile. However, each ministry is expected to contribute to further
participation in adult learning is well below the EU improvement of the quality of law.
average. In 2022, gender parity in senior
administrative positions was below the EU-27 Graph A13.1: Greece. Median time for the adoption
average (Table A13.1). In June 2022, a law on of laws, and share of laws adopted in 30 days or
human resources management in the Greek public less
sector was adopted. It provides for: (i) a new skills 80 0.9
framework for all public servants; (ii) a new
0.8
system for setting objectives for administrative 70

units and employees; (iii) a new self-assessment 0.7

60
framework common to all public services to
0.6
analyse their operation and performance; (iv) 50
financial bonuses for public servants in selected 0.5
public services. Based on the new skills framework, 40
0.4
the Greek authorities have streamlined the job
30
classification system, leading to 550 different job 0.3
classifications, down from approximately 2700. 20
0.2
The streamlining was accompanied by asigning
specific skills to each job classification, thus 10 0.1
contributing to a more targeted hiring of public
0 0
servants. Lastly, in March 2023 the authorities EL EU-27 EL EU-27
applied for the first time the new selection process Median time for Share of laws adopted in 30 of
of public servants set out by law 4765/2021, law adoption less days

based on knowledge, skills and efficiency tests. 2016_21 2016_19 2020_21

Greece has made considerable progress in Source: European Commission based on national parliament’s
websites
regulatory management since adopting
legislation on improving regulation in
Greece is less advanced than most other
2019 (101). Since 2021, legislative planning takes
Member States in the provision of open data
place on a yearly basis through the publication of
(Graph A13.2). Over the past 3 years, Greece’s
the Consolidated Government Policy Plan in
performance in the open government data
December, upon approval by the Ministerial
indicator has deteriorated and now ranks among
Council. In addition, ex ante regulatory impact
the bottom 20% of countries. Against this

(100) Worldwide Governance Indicators, 2021 data.

(102) OECD, Better Regulation Practices across the European Union
( ) Law 4622/2019
101
2022

60
backdrop, the recovery and resilience plan targets
the completion of the data governance strategy by
the 4th quarter of 2025.

Graph A13.2: Open government data maturity

indicator: 2022 scores (% of the total maximum
score) (lhs); country ranking, overall score (rhs)

100% 2022 scores (lhs) Country ranking (rhs) 30

90%
25
80%
70%
20
60%
50% 15
40%
10
30%
20%
5
10%
0% 0
Impact
Portal
Policy

Quality

2018

2019

2020

2021

2022
Total

Open data 2022 Open data ranking

EL2022 EU-27 EL

(1) right hand side chart: low values denote a good

performance.
Source: Open Data Maturity | data.europa.eu

The justice system continues to face

challenges as regards its overall efficiency.
The time it takes to resolve litigious civil disputes
in first instance has continued to increase, to 728
days in 2021 compared to 637 days in 2019 (no
data are available for 2020). The recovery and
resilience plan includes reforms to accelerate the
administration of justice including by revising the
judicial map and setting up a temporary bonus
system for judicial clerks. It also includes reforms
to increase the digital transformation of justice (E-
justice), where considerable improvements are
needed, although certain digital tools are already
used in courts. No systemic deficiencies in judicial
independence have been reported (103).

(103) For a more detailed analysis of the performance of the

justice system in Greece, see the 2023 EU Justice
Scoreboard (forthcoming) and the country chapter for Greece
in the 2023 Rule of Law Report (forthcoming).

61
Table A13.1: Public administration indicators

EL Indicator (1) 2017 2018 2019 2020 2021 2022 EU-27(2)

E-government and open government data
Share of individuals who used the internet within the last year to
1 67.2 67.8 68.2 67.3 69.5 n/a 64.8
interact with public authorities (%)
2 E-government benchmark overall score (3) n/a n/a n/a 52.2 52.3 60.4 72.9

3 Open data and portal maturity index n/a 0.7 0.7 0.9 0.8 0.6 0.8
Educational attainment level, adult learning, gender parity and ageing
Share of public administration employees with tertiary education
4 53.1 55.2 53.0 53.1 52.5 (b) 53.7 52.0
(levels 5-8, %)
Participation rate of public administration employees in adult
5 5.9 6.2 4.3 4.4 3.2 (b) 2.5 16.9
learning (%)
6 Gender parity in senior civil service positions (4) 2.8 4.8 4.8 7.6 12.8 15.8 11.0

7 Ratio of 25-49 to 50-64 year olds in NACE sector O 2.8 2.5 2.0 1.9 1.8 (b) 1.7 1.5
Public financial management
8 Medium term budgetary framework index 0.9 0.9 0.9 0.9 0.9 n/a 0.7

9 Strength of fiscal rules index 0.7 0.7 0.9 0.9 0.9 n/a 1.5
Evidence-based policy making
10 Regulatory governance 0.98 n/a n/a n/a 1.25 n/a 1.7

( ) High values denote a good performance, except for indicator # 6. ( ) 2022 value. If not available, the 2021 value is shown.
1 2

(3) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the
existence of key enablers for the provision of those services. ( 4) Defined as the absolute value of the difference between the
percentage of men and women in senior civil service positions.
Flags: (b) break in time series; (d) definition differs; (u) low reliability.
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Labour Force
Survey, Eurostat (# 4, 5, 7), European Institute for Gender Equality (# 6); Fiscal Governance Database (# 8, 9); OECD Indicators of
Regulatory Policy and Governance (# 10).

62
FAIRNESS
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF
THE EUROPEAN PILLAR OF SOCIAL RIGHTS
The European Pillar of Social Rights is the Table A14.1: Social Scoreboard for Greece
compass for upward convergence towards
Policy area Headline indicator
better working and living conditions in the Early leavers from education and training
EU. This Annex provides an overview of Greece’s (% of population aged 18-24, 2022)
4.1
Share of individuals who have basic or above basic overall
progress in implementing the Pillar’s 20 principles Equal opportunities
digital skills (% of population aged 16-74, 2021)
52.48

and EU headline and national targets for 2030 on and access to the
Youth NEET rate
(% of population aged 15-29, 2022)
15.4
labour market
employment, skills and poverty reduction. Gender employment gap
(percentage points, 2022)
21
Income quintile ratio
5.79
The labour market continued to recover from (S80/S20, 2021)
Employment rate
the COVID-19 crisis, although significant
66.3
(% of population aged 20-64, 2022)
Unemployment rate
challenges persist, particularly for women, Dynamic labour
markets and fair
(% of active population aged 15-74, 2022)
12.5
Long term unemployment
young people, and vulnerable groups. In working conditions
(% of active population aged 15-74, 2022)
7.7

response to the economic recovery, the GDHI per capita growth

(2008=100, 2021)
79.32

employment rate (66.8% in Q4-2022) is now At risk of poverty or social exclusion rate
28.3
(% of total population, 2021)
5.5 percentage points (pps) above its pre- At risk of poverty or social exclusion rate for children
32
pandemic level but remains among the lowest in (% of population aged 0-17, 2021)
Impact of social transfers (other than pensions) on poverty
the EU. The unemployment rate decreased in late reduction (% reduction of AROP, 2021)
20.65
Social protection and Disability employment gap
2020 and 2021, reaching 11.8% in Q4-2022, inclusion (percentage points, 2021)
23.8

which is a 12-year low. The long-term Housing cost overburden

(% of total population, 2021)
28.8

unemployment rate remains one of the highest in Children aged less than 3 years in formal childcare
32.3
(% of population under 3-years-old, 2021)
the EU (7.7% in 2021 vs 2.4%), disproportionately Self-reported unmet need for medical care
6.4
affecting women (10.5%). The gender employment Critical
To watch
Weak but
(% of population 16+, 2021)
Good but to
On average Better than average Best performers

gap is among the largest at 21 pps in 2022. In

situation improving monitor

(1) Update of 27 April 2023. Members States are classified on

2021, Greece had the highest unemployment rate the Social Scoreboard according to a statistical methodology
in rural areas (15.2%), with women being agreed with the EMCO and SPC Committees. It looks jointly at
disproportionately affected (19.3% vs 12.5% of levels and changes of the indicators in comparison with the
men). Moreover, the share of young people not in respective EU averages and classifies Member States in seven
categories. For methodological details, please consult the
employment, education, and training, 15.4% in Joint Employment Report 2023; NEET: neither in employment
2022, remained higher than the EU average nor in education and training; GDHI: gross disposable
(11.7%). In 2022, youth unemployment was household income.
among the highest in the EU (31.4% vs 14.5%). Source: Eurostat
There is room to make outreach measures and
active labour market policies more effective. The Skills mismatches remain high, and the skills
disability employment gap was also slightly above supply still has to better meet the labour
the EU average (23.8 pps in 2021 vs 23.1 pps), market’s needs. The employment rate of recent
and persons with disabilities find it difficult to graduates (60.1% in 2021) is lower than the
access training. Involuntary part-time employment overall employment rate, which suggests school-
also remained high (49.4% in 2022), with 21% of to-work transition challenges. While the job
those concerned experiencing in-work poverty. vacancy rate is relatively low in Greece compared
to the EU average (1.0% vs 2.9% in Q4-2022),
Efforts to strengthen active labour market sectors such as trade, transport and
policies and public employment services are accommodation have difficulties in filling certain
key to fostering labour market participation. vacancies. The share of individuals having at least
Targeted employment subsidies and other basic digital skills stood at 52.5% in 2021, slightly
activation measures are critical to strengthening below the EU average (54%). Vocational education
employment. The potential of the social economy and training remain an unattractive option for
is also still untapped, and there is scope for upper-secondary students; only 31.9% of pupils
getting social partners more involved in policy were enrolled in upper-secondary vocational
design and implementation. Efforts in all these education in 2020. In addition, 3.5% of adults
areas can support progress towards the national participated in learning over the past 4 weeks in
employment rate target of 71.1% by 2030. 2021 (vs 10.8% in the EU). With the support from

63
the ESF+ and the RRF, the planned reform of adult out of poverty and social exclusion and the
learning can improve the quality and take-up of complementary child poverty target of 24.2%.
up- and reskilling programmes and contribute to
achieving the national target of 40% of all adults There is room to improve the capacity of the
participating in education, training, and learning social benefits system to reduce poverty and
every year by 2030. The implementation of a inequalities in Greece. The impact of social
comprehensive skills forecasting system using the transfers (excluding pensions) on reducing poverty
upgraded labour market diagnosis mechanism, decreased from 24.7% in 2020 to 20.6% in 2021
coupled with curricula relevant to the labour (vs 37.1% in the EU). In 2021, the income share of
market can improve employment outcomes (see the richest 20% of the population was 5.8 times
Annex 15). that of the poorest 20%, which is among the
highest in the EU. The adequacy of the minimum
Table A14.2: Situation of Greece on 2030 income scheme is below the EU average, and gaps
employment, skills and poverty reduction targets persist in access to social protection for non-
National EU
standard workers, notably the self-employed
Latest Trend (26.8% of the working-age population in 2021),
Indicators target by target
data (2015-2022)
2030 by 2030 non-EU-born people and Roma. The social benefit
66.3
recipients’ rate was 66% among people living in
Employment (%) 71 78 very low work-intensity households and below the
(2022) poverty line, while it stood at 82% in the EU. In-
work poverty increased to 11.3% in 2021, which is
Adult learning1 (%)
16.0
40 60 above the EU average of 8.9%.
(2016)
Poverty reduction2 -88
-860 -15 000
The scope of social, healthcare, and long-
(thousands) (2021)
term care services to improve the situation
(1) Adult Education Survey, adults in learning in the past 12
months. (2) Number of persons at risk of poverty or social
of vulnerable groups is limited. The
exclusion (AROPE), reference year 2019. Base values are deinstitutionalisation process for children and
2019 for employment rate, 2016 for adult participation in persons with disabilities saw little progress in
learning, and the reference year for AROPE is 2019. Latest 2021. Coordinated action at national and regional
values are 2021 for employment rate (annual), 2016 for
adult participation, and 2021 for AROPE. AROPE reduction
levels is key to coupling the implementation of
does not include population projections. substantial funding with effective social reforms.
Source: Eurostat, DG EMPL Adverse demographic trends and the estimated
increase in the old-age dependency ratio (from
Despite improvements, the risk of poverty in 34.6% in 2019 to 41.9% in 2030) highlight the
2021 remains high in Greece, and children need for making more long-term care services
available. Public expenditure on long-term care in
are disproportionately affected. The share of
Greece is considerably lower than the EU average
people at risk of poverty or social exclusion stood
(0.14% versus 1.81% of GDP in 2020). The
at 28.3% in 2021, 0.9 pps higher than in 2020 and
governance system for long-term care is
well above the EU average (21.7%). In 2021, the
fragmented, and there is no strategy or
share of the population affected by energy poverty
comprehensive mapping of needs. The system
(17.5%) and excessive housing costs (28.8%) was
relies primarily on informal family carers, with
among the highest in the EU (see Annex 8). The
nearly three out of ten adults in Greece providing
proportion of children experiencing poverty peaked
informal care at least once a week (104). Rural
in 2021, with almost one in three children
areas are much worst off in terms of distance to
affected. The share of children experiencing severe
healthcare facilities (32 km) than cities (4 km) and
material and social deprivation (16.1% in 2021)
towns and suburbs (19 km). Albeit decreasing,
was also high. Territorial disparities are large, with
self-reported unmet needs for medical care persist
people living in insular, rural, and sparsely
(see Annex 16).
populated areas heavily affected by poverty risks
(see Annex 17). The ESF+ and RRF will provide
substantial funding to tackle child poverty and
reform child protection services. Further efforts to (104) Source: European Commission (2021), Study on exploring the
strengthen social policy are key to achieving, by incidence and costs of informal long-term care in the EU,
VC/2019/0227.
2030, the national target of lifting 860 000 people

64
ANNEX 15: EDUCATION AND TRAINING
This Annex outlines the main challenges for lack basic reading skills compared with only one in
Greece’s education and training system in light of seven students from the highest quartile. One in
the EU-level targets and other contextual three disadvantaged pupils underperform in all
indicators under the European Education Area three subjects simultaneously. Migrant children’s
strategic framework, based on the 2022 Education limited access to post-secondary and tertiary
and Training Monitor. education also gives cause for concern.
Educational outcomes of Roma pupils lag far
Greece takes measures to address teacher behind those of their peers. In order to improve
shortages. Greece has qualified and committed educational outcomes, formative tests are being
teachers but, in 2021, more than half were above introduced in the final years of primary and lower-
50 years old. The government attempted to secondary education in the form of a programme
anticipate the challenge of teacher shortages by for system-level evaluation of 12 000 pupils in
appointing, during the last 2 years, 25 000 Greek and mathematics.
permanent teachers for all levels of compulsory
education, including for special needs education. In Greece ranks last in the EU in participation in
addition, an even higher number of substitute early childhood education and care (age 3+),
teachers were appointed during this period. Law but performs better for the 4+ age bracket.
4589/2019 changed the conditions for appointing Greece has a differentiated system of early
teachers. The previously obligatory exams on childhood education and care (ECEC), which
subject and pedagogical knowledge were distinguishes non-compulsory early childhood care
abolished; the new hiring system relies solely on a (ECC) for children aged 0-3 years and compulsory
credit-point system based on academic early childhood education (ECE) for children aged
credentials, years of service and social criteria. 4-5 years. Regarding ages 3+ and 4+, Greece
With the new regulations, the law focuses recorded one of the best improvements (106) in the
primarily on regularising the situation of substitute EU, with an increase of 2.5 percentage points (pps)
teachers. Based on GDP per capita, teachers in compared with 2019. Yet, in 2020, only 71.3% of
Greece receive low salaries (105), also compared children aged 3 to the starting age of compulsory
with other professionals of similar qualifications. education participated in early childhood
Despite the low salaries, the teaching profession is education. Most children start attending school at
attractive in terms of teaching hours and the low age 4, the age that constitutes the start of
ratio of students per teaching staff (OECD). compulsory pre-primary education in Greece, fully
Opportunities and incentives to improve their in practice since the school year 2021/2022.
career prospects are being gradually provided to Between 2019 and 2020, for those at risk of
teachers, based on law 4823/2021 on “Schools’ poverty or social exclusion, the participation of
upgrade and teachers’ empowerment”. Teacher children aged less than 3 in formal childcare
evaluation, at the top of the national political dropped in Greece by 11.5 pps. Low participation in
agenda, is underway. early childhood education and care, especially of
disadvantaged children under the age of 4,
Educational outcomes are not satisfactory. contributes to educational inequalities. Capacity
Greece has the highest shares of low-performing constraints and teacher shortages are ongoing for
young people in the Programme for International this level of education.
Student Assessment (PISA). One in five pupils do
not reach a minimum level in any of the three The share of young individuals aged 16 to 19
subject areas tested (maths, reading, science). In with at least basic digital skills stands high
addition, in all three subjects, the number of low- in Greece (107). At 89%, against an EU-level
performing pupils increased between 2009 and average of 69% (DESI, 2022), Greece is among
2018, while the share of top achievers for the the highest performers in the EU. Digital education
same period decreased. Socio-economic status
and migrant background greatly affect educational (106) Education and Training Monitor 2022, Volume I.
results. Almost half of students from the lowest
(107) OECD (2021), Suarez-Alvarez, J. (2021), ‘Are 15-year-olds
socio-economic quartile or migrant background prepared to deal with fake news and misinformation?’, PISA
in Focus, No 113, OECD Publishing,
Paris, https://doi.org/10.1787/6ad5395e-en.
(105) Eurydice, Teachers’ and school heads’ salaries and
allowances in Europe 2019/2020. .

65
is on track since the pandemic. However, the share EU average of 11.1 pps), with 51.8% of all
of 15-year-olds being able to clearly distinguish graduates being women. At 38.4%, the overall
facts from opinions when searching information proportion in Greece of female graduates in
on the internet is below the OECD average: 40.5% science, technology, engineering and mathematics
in Greece vs an OECD average of 47%. The socio- is also above the EU average of 33.2% (OECD).
economic background of students also comes into Participation in adult learning remains limited (see
play here. The development of digital skills is a Annex 14).
political priority in Greece and is supported under
the Greek recovery and resilience plan. Through Graph A15.1: Tertiary educational attainment rate
the Recovery and Resilience Facility, students have (25-34), 2022
been equipped with digital devices and their digital
60%
skills are being further improved. Teachers could
50%
also buy digital devices through vouchers
40%
distributed to all, and teacher training in digital
30%
technology is ongoing.
20%
Tertiary education attainment is high, but a 10%
significant gender gap persists. With 45.2% of 0%
Total Women Men Rural Cities
young people aged 25-34 holding a tertiary areas
education degree, Greece is close to the EU-level
EU EL
target of 45% by 2030 and surpassing the EU
average (42%.) However, there is a significant Source: Eurostat
gender gap in favour of women (12.7 pps vs the

Table A15.1: EU-level targets and other contextual indicators under the European Education Area
strategic framework
2015 2022

Indicator Target Greece EU27 Greece EU27

2020,
1 d 2020
Participation in early childhood education (age 3+) 96% 63.0% 91.9% 71.3% de
93.0%

2018 2018
Reading < 15% 27.3% 20.0% 30.5% 22.5%
2 2018 2018
Low achieving 15-year-olds in: Mathematics < 15% 35.8% 22.3% 35.8% 22.9%
2018 2018
Science < 15% 32.7% 21.1% 31.7% 22.3%
3
Total < 9% 7.9% 11.0% 4.1% 9.6%

3
Men 9.4% 12.5% 3.8% 11.1%
By gender
Women 6.4% 9.4% 4.5% 8.0%

4
Cities 4.7% 9.6% 3.2% 8.6%
Early leavers from education and training (age 18-24) By degree of urbanisation
Rural areas 13.3% 12.2% 4.6% 10.0%
Native 6.8% 10.0% 3.7% 8.3%
5 u
By country of birth EU-born 20.6% 20.7% : 20.3%
u
Non EU-born 24.8% 23.4% 24.1% 22.1%
6 2018 2018
Equity indicator (percentage points) : : 25 19.3
7
Exposure of VET graduates to work based learning Total ≥ 60% (2025) : : 35.7% 60.1%
8
Total 45% 40.1% 36.5% 45.2% 42.0%

8
Men 34.0% 31.2% 39.1% 36.5%
By gender
Women 46.3% 41.8% 51.8% 47.6%

9
Cities 47.1% 46.2% 54.0% 52.2%
Tertiary educational attainment (age 25-34) By degree of urbanisation
Rural areas 27.1% 26.9% 28.5% 30.2%
Native 43.6% 37.7% 47.4% 43.0%
10 u
By country of birth EU-born 14.1% 32.7% 38.4% 39.5%
Non EU-born 10.1% 27.0% 14.0% 35.7%
11 2020 2020
Share of school teachers (ISCED 1-3) who are 50 years or over 39.1% 38.3% 52.3% 39.2%

Source: (1,3,4,5,7,8,9,10,11) = Eurostat; 2 = OECD (PISA); 6 = European Commission (Joint Research Centre). Notes: Data are not
yet available for the remaining EU-level targets under the European Education Area strategic framework, covering
underachievement in digital skills and participation of adults in learning. The equity indicator shows the gap in the share of
underachievement in reading, mathematics and science (combined) among 15-year-olds between the lowest and highest quarters
of socio-economic status

66
ANNEX 16: HEALTH AND HEALTH SYSTEMS
A healthy population and an effective, accessible Spending on preventive care, disease
and resilient health system are prerequisites for a detection, surveillance and control
sustainable economy and society. This Annex programmes has increased, but it is below
provides a snapshot of population health and the the EU average of 3.4%. This is reflected in a
health system in Greece. significant rise in the share of total spending on
preventive care in 2020 (1.8%, up from 1.3% in
Life expectancy in Greece is above the EU 2019), which is largely due to a 124% increase
average, although it has dropped (from EUR 59 million to EUR 132 million) in
significantly since 2019. This reflects the effect epidemiological surveillance and risk and disease
of COVID-19, which caused almost three times control programmes. The public health response to
more deaths in 2021 than in 2020 (108). Greece COVID-19 has led to similar budget developments
fares comparatively well in avoiding deaths from across the EU. Another action to safeguard public
treatable causes. In 2020, the leading cause of health is the ongoing rationalisation of the use of
mortality was cardiovascular diseases, but antimicrobials, as part of broader efforts to foster
malignant neoplasms were also major the rational use of medicines. The situation in
contributors. Greece has improved significantly, with the daily
consumption in 2021 falling to 67% of that in
Graph A16.1: Life expectancy at birth, years 2019. This decrease exceeds the decrease noted
across the EU on average by more than 18%, most
81.9
likely because of the COVID-19 pandemic.
81.7
81.5 81.4 81.4 However, Greece is still one of the four Member
81.3 80.2 States with the highest use of antibiotics. A
80.9 81.0
80.9
80.4 comprehensive public health system reform,
80.1
entitled the Spyros Doxiadis programme, includes
2016 2017 2018 2019 2020 2021
reforms of the delivery of public health services,
Greece EU
of population health and environmental health
monitoring, and of the rapid response services. It
Source: Eurostat
also includes the overall digital transformation of
the public health sector.
Total health spending relative to GDP in
Greece was below the EU average in 2020. In The public share of health spending is
2020, total healthcare spending increased to 9.5% comparatively low (61.8% in 2020). The share
of GDP (EU 10.9%). This is in line with the upward of out-of-pocket payments is very high (33.4%,
trend in all Member States in 2020. In Greece, this the second highest in the EU). Public spending on
increase is largely due to the severe GDP health is projected to increase by 0.8 percentage
contraction (by 9%, compared to 5.7% in the EU points (pps) of GDP by 2070 (compared to 0.9 pps
overall). This is also corroborated by the fact that for the EU overall) (see Annex 21).
the share of health spending in total public
spending was reduced by 6.7% between 2019 and
Graph A16.2: Projected increase in public
2020. The amounts spent per capita on inpatient expenditure on healthcare over 2019-2070
care (EUR 605), pharmaceuticals (EUR 443) and
outpatient care (EUR 241) are all below the EU
average (EUR 863, EUR 457 and EUR 737,
respectively). However, for spending on inpatient Greece 4.4 0.8
care and pharmaceuticals as a share of GDP, 2019
Greece ranks first among all Member States. By 2070
EU 6.6 0.9
contrast, Greece’s spending on outpatient care as increase
a share of GDP is among the lowest of all Member 0 2 4 6 8
States. % of GDP

AWG reference scenario

Source: European Commission / EPC (2021)
(108) Based on data provided directly by Member States to ECDC
under the European Surveillance System (data current as of
13 April 2023)

67
Greece has the highest number of doctors aim to introduce home nursing and to set up a
and the lowest number of nurses per capita radiotherapy centre and a haematological clinic for
of all EU countries. However, these numbers cell and genetic therapy.
include all doctors who are licensed to practice
rather than just those who are professionally Policies to keep public spending on
active, and only nurses in hospitals are counted. pharmaceuticals under control face
The overwhelming majority of doctors are challenges. These policies include’ claw-backs,
specialists, with general practitioners accounting which are repayment orders against the industry in
for only 7% of all doctors, compared to the EU case of budget overshoots. For 2023, pre-agreed
average of 26%. Since the start of the COVID-19 budget ceilings will probably be complied with, as
pandemic, special recruitment schemes have authorities negotiated higher rebates. However,
largely responded to the surge in demand. there seem to be difficulties, both in outpatient
Scheduled leave and planned retirement of staff and inpatient settings, in controlling demand
were suspended and retired or non-practising through compulsory prescribing protocols and
health workers were invited to re-join the rational prescribing practices (e.g. to prevent
workforce. Health professionals working in the excessive use of antibiotics).
private sector were offered temporary contracts to
work in public hospitals, with added incentives to Reforms to strengthen primary care rely on
attract candidates to vacant positions. Health achieving appropriate numbers of doctors
services and facilities are heavily concentrated in and nurses. Recent reform measures focus on
urban areas. Before the pandemic, there were 364 doctors. A new remuneration package was offered
hospital beds per 100 000 population on average to doctors and now 3385 doctors are working in
– well below the EU average rate of 387. During primary healthcare, enabling more than 50% of
the second wave of the COVID-19 pandemic, in the population to be registered with a doctor. The
2020, when cases spiked significantly, some of the aim is to reach a stock of doctors that covers the
worst affected regions did not have enough entire population and activate gatekeeping.
hospital beds and sought capacity in the private Currently, coverage is still insufficient, and this
sector. acts as a bottleneck for the full implementation of
the reform, the aim of which is to ensure full and
Through its recovery and resilience plan equal access to the healthcare system through
(RRP), Greece plans to invest EUR 1 486 primary healthcare. This calls for additional
million (4.9% of the RRP’s total value). These measures to strengthen existing incentives to
investments are planned against the backdrop of create the basis for comprehensive primary
overall low historical investment levels in healthcare, such as limiting reimbursement of
healthcare, measured as a share of gross fixed services and prescriptions by social providers that
capital formation in GDP. The reforms focus on are not affiliated with the national organisation for
primary healthcare, pharmaceutical funding, public the provision of healthcare services (EOPYY).
health, mental health, and the hospital
remuneration scheme. The investments target the
infrastructure and digitalisation of hospitals and

Table A16.1: Key health indicators

EU average
2017 2018 2019 2020 2021
(latest year)
Treatable mortality per 100 000 population (mortality avoidable through optimal
94.2 90.0 93.1 92.4 NA 91.7 (2020)
quality healthcare)
Cancer mortality per 100 000 population 245.4 241.7 241.0 240.8 NA 242.2 (2020)
Current expenditure on health, % GDP 8.1 8.1 8.2 9.5 NA 10.9 (2020)
Public share of health expenditure, % of current health expenditure 60.6 59.2 61.5 61.8 NA 81.2 (2020)
Spending on prevention, % of current health expenditure 1.3 1.2 1.3 1.8 NA 3.4 (2020)
Acute care beds per 100 000 population 360 363 364 NA NA 387.4 (2019)
Doctors per 1 000 population * 6.1 6.1 6.2 6.2 NA 3.9 (2020)
Nurses per 1 000 population * 3.3 3.4 3.4 NA NA 8.3 (2020)
Consumption of antibacterials for systemic use in the community, daily defined
32.1 32.5 32.4 26.4 21.8 14.5 (2021)
dose per 1 000 inhabitants per day (total consumption for CY and CZ) **

Note: The EU average is weighted for all indicators, except for (*) and (**), for which the EU simple average is used. The simple
average for (*) uses data for 2020 or most recent year if former not available. Doctors' density data refer to practising doctors in
all countries except EL, PT (licensed to practice) and SK (professionally active). Nurses' density data refer to practising nurses in all
countries except FR, PT, SK (professionally active) and EL (nurses working in hospitals only).
Source: Eurostat; ** ECDC

68
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL
This Annex showcases the economic and Map A17.1: Regional Competitiveness Index in
social regional dynamics in Greece, providing Greek regions (2022)
an update on economic, social and territorial
cohesion in the Greek regions compared with the
EU as a whole and the main regional economic
recovery challenges.

Regional disparities in Greece increased

between 2011 and 2020. In 2020, all Greek
regions were below 90% of the EU average in
terms of GDP per capita in purchasing power
standard (PPS) terms. Attiki and Notio Aigaio, were
'transition regions' while all regions are
categorised as 'less developed regions' in 2021-
2027.

Five Greek regions ranked below 50% of the

EU average in terms of GDP per capita in eek regions rank below the EU average on
2021. This includes Voreio Aigaio, Anatoliki competitiveness. The vast majority ranks below
Makedonia-Thraki, Ipeiros, Thessalia and Dytiki 75% of the EU average, with the exception of
Ellada. GDP per capita in Attiki (86% of the EU Attiki (92.6) who is the forerunner (Map A17.2)
average) was more than twice that of Voreio
Despite an overall improvement since 2014
Aigaio (42%) and almost twice that of Anatoliki
Makedonia-Thraki (45%) and Ipeiros (46%). and a recent increase, regional innovation
Internal convergence in Greece has therefore not performance remains low in Greece (Map
advanced. A17.1). All the Greek regions rank below the EU
average in terms of competitiveness. Attiki (the
Graph A17.1: GDP per head (2010) and GDP growth capital region) is the frontrunner, performing four
(2011-2020) in Greece times better than Voreio Aigaio.
Capital region Other NUTS2 regions National average EU27
R&D expenditure has increased in recent
2.0
years, but 2020 expenditure was lower than
Annual real GDP per head growth

(average % change on the preceding year)

1.0
the EU average. Leaders in R&D expenditure
0.0
were Attiki (1.89% of GDP) and Kriti (1.88%) whilst
2011-2020

Notio Aigaio came last (0.27%).

-1.0

-2.0

-3.0
Greece has made good progress in the digital
-4.0
economy and society index (DESI) in recent
-5.0
years in comparison with other EU Member
50

60

70

80

90

100

110

120

130

GDP (PPS) per head in 2010 (EU = 100) States. According to the 2022 DESI, the number
Source: EUROSTAT
of active users of e-government services (69%)
had increased on the previous year by 67% and
was 4 percentage points above the EU average
There has been a generalised trend of
(65%). Greece also made progress in terms of its
decreasing labour productivity despite a population having at least basic digital skills (52%,
recent increase in 2021. Labour productivity which is very close to the EU average of 54%).
(measured as gross value added (GVA) per person
employed) was 66% of the EU average in 2021.
Attiki and Sterea Ellada remained the leaders in
labour productivity (82% and 73% of the EU
average respectively).

69
Table A17.1: Selected indicators at regional level in Greece
Population
Productivity At-risk-of-
aged 30-34
(GVA (PPS) poverty or R&D
GDP per head Unemployment with high
NUTS region name per person social expenditure
(PPS) (2021) rate (2021) educational
employed) exclusion (2019)
attainment
(2021) (2021)
(2021)
EU average 100.0 100.0 7.0 21.7 41.6 2.3
Elláda 64.0 66.3 14.7 28.3 44.3 1.3
Attiki 86.0 81.6 11.9 21.6 51.5 1.6
Voreio Aigaio 42.0 55.0 13.8 28.1 40.9 0.7
Notio Aigaio 64.0 60.1 18.8 23.2 29.7 0.2
Kriti 52.0 54.5 16.3 28.8 36.3 1.5
Anatoliki Makedonia, Thraki 45.0 51.3 18.5 35.3 38.0 0.8
Kentriki Makedonia 50.0 56.2 16.1 33.7 49.0 1.1
Dytiki Makedonia 53.0 62.6 19.7 28.9 45.7 0.4
Ipeiros 46.0 52.2 15.1 28.0 37.4 1.5
Thessalia 49.0 53.2 16.6 26.1 36.0 1.0
Ionia Nisia 57.0 54.2 13.2 29.4 34.7 0.4
Dytiki Elláda 48.0 53.8 17.4 42.0 40.8 1.4
Sterea Elláda 65.0 72.9 17.2 30.8 39.2 0.6
Peloponnisos 56.0 59.1 12.7 35.8 37.3 0.6
Source: EUROSTAT

Despite improving post-COVID-19 trends, Greek regions and particularly those with
integration in the labour market remains a remote and island areas are facing
challenge, particularly for people aged 15- important challenges related to low
29, with the majority of Greek regions being accessibility to healthcare within their
well above the EU average. Around one in five communities. For example, 10.9% of citizens in
young people living in the capital region were Anatoliki Makedonia-Thraki reported that they had
unemployed in 2020 (21.3% of the active foregone medical consultations due to high costs,
population aged 15-24) and two out of three were long travelling distances or waiting lists.
unemployed in Sterea Ellada (63.6%). Moreover, in
2021, Greece had the highest unemployment rate On average, slightly less than 30% of the
in rural areas. Greek population was at risk of poverty or
social exclusion (AROPE) in 2020. There were
Harnessing talent remains a challenge in significant variations across the country. The
several Greek regions as a result of a declining capital region of Attiki had the lowest rate of
working age population, a low share of people with AROPE in the country (21.8%) while the western
tertiary education and significant numbers of region of Dytiki Ellada had the highest (almost
young people moving away. In fact, low 44%). The risk of poverty or social exclusion
educational attainment is high and remains above remains high. 34% of people living in rural areas
the EU average in all the regions but the capital at risk in 2021 (109). This was the third highest rate
region of Attiki. Indeed, Attiki is the only region in the EU and the EU average was 22.5%.
where more than 50% of young people
(aged 30-34) have completed tertiary education
(the national average is 43.7%, which is slightly
above the EU average for 2017-2019). The share
of early school leavers is low for Greece as a
whole (3.2% in 2021) but significantly higher in
Central Greece 11.1%), Western Greece (6.9%) and
the Aegean islands (above 8%). (109) source: Eurostat
(https://ec.europa.eu/eurostat/databrowser/view/ILC_PEPS13
N__custom_3944756/default/table?lang=en).

70
MACROECONOMIC STABILITY
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS
Greece’s predominantly bank-based financial financing was markedly reduced in December
sector has a high concentration rate and low 2022, as banks started the gradual repayment of
foreign ownership. Following the substantial amounts borrowed under ECB’s targeted longer-
consolidation that took place during the Greek term refinancing operations (TLTRO III).
economic adjustment programmes (2010-2018),
the four domestic systemically important banks Energy costs and rising interest rates could
have a market share of around 95% of banking- affect debtors and increase the cost of
sector assets, one of the highest concentrations in funding for banks. Rising interest rates have
the EU. These four banks also have a considerable started to improve banks’ profitability in the short
presence in Bulgaria, Romania and Cyprus. The term. However, given the banks’ predominantly
banks are mainly privately-owned. However, the variable-interest loan book, rising interest rates
previous crisis and its aftermath left a legacy of combined with higher energy prices and a
sizeable State participation in the top five banks gradually worsening macroeconomic outlook, risk
through the Hellenic Financial Stability Fund, which eroding the repayment capacity of debtors, with
recently approved its strategy to divest these potential adverse impact on the banks’ asset
holdings. quality. To tackle this risk, the majority of Greek
banks recently announced a new reward program
Banks’ asset quality and profitability have to “freeze” for 12 months the interest rate of
continued to improve, supporting the gradual variable-rate mortgage loans of all performing
restoration of capital ratios. The non- debtors. The inflow of new NPLs so far remains
performing-loan (NPL) ratio has continued to modest, albeit with some net inflows on loans to
improve, falling to 6.4% of total loans in the first households. Banks’ profitability could also come
nine months of 2022, compared to 26.5% in 2020. under pressure from the further increase in their
This sharp reduction in legacy NPLs was largely cost of funding, given: (i) their need for future
due to: (i) state-sponsored securitisations of NPLs issuances of long-term debt to meet the minimum
under the Hellenic Asset Protection Scheme, which requirement for own funds and eligible liabilities
expired in October 2022; and (ii) outright loan (MREL); and (ii) the recalibration and gradual
disposals. In the future, banks’ in-house phasing out of targeted longer-term refinancing
management of loans is expected to be the main operations. A further downside risk stems from a
driver in reducing NPL ratios closer to the EU potential retrenchment of credit demand if there is
average. This may prove challenging, particularly a recession.
for some less-significant institutions carrying
many NPLs. The core profitability of banks has Graph A18.1: Evolution of credit activity
improved thanks to: (i) lower provisioning needs; 20 %
(ii) cost control; (iii) sustained growth in fees and
commissions; and (iv) new, more profitable lending
15
in 2022. In parallel, systemically important banks
have taken measures to shield their balance
10
sheets from volatility in sovereign yields, given
their significant holdings of domestic sovereign
bonds. The prudential phase-in of the International 5

Financial Reporting Standards 9 (IFRS9) accounting

rules adversely affected banks’ capital positions in 0

the first quarter of the year. However, this

negative effect was fully offset by profits in the -5

first nine months of 2022. Nevertheless, Greek

Total private NFC HH
banks’ capital position remains among the lowest -10
2009

2016

2020
2010
2011
2012
2013
2014
2015

2017
2018
2019

2021
2022
2023

in the EU, while the quality of regulatory capital

also remains a concern, given the high share of Adjusted for loan sales and securitisations.
deferred tax credits. Systemically important banks Source: ECB.
have comfortable liquidity coverage ratios on the
back of sustained deposit growth, while their Lending growth picked up in 2022 for
sizeable reliance on European Central Bank (ECB) businesses but remains negative for

71
Table A18.1: Financial soundness indicators
2017 2018 2019 2020 2021 2022 EU Median
Total assets of the banking sector (% of GDP) 170.4 163.0 168.9 203.2 180.7 156.2 276.8 207.9
Share (total assets) of the five largest banks (%) 97.0 96.8 97.4 97.0 98.0 - - 68.7
1
Share (total assets) of domestic credit institutions (%) 97.9 98.0 98.7 98.7 98.6 98.6 - 60.2
NFC credit growth (year-on-year % change) 0.0 0.2 1.8 10.2 3.3 11.6 - 9.1
HH credit growth (year-on-year % change) -2.0 -2.2 -2.8 -2.0 -2.0 -1.6 - 5.4
1
Financial soundness indicators:
- non-performing loans (% of total loans) 45.0 41.6 35.5 26.5 8.6 6.4 1.8 1.8
- capital adequacy ratio (%) 17.1 16.0 17.3 16.7 16.2 16.2 18.6 19.8
2
- return on equity (%) -1.3 -0.4 0.7 -7.9 -20.1 14.9 6.1 6.6
1
Cost-to-income ratio (%) 52.7 55.2 52.1 42.6 64.4 37.0 60.6 51.8
1
Loan-to-deposit ratio (%) 83.5 74.7 74.8 63.9 56.9 57.1 88.6 78.0
Central bank liquidity as % of liabilities 16.2 5.2 3.2 15.3 17.9 12.6 - 2.9
Private sector debt (% of GDP) 120.4 119.1 110.3 124.9 120.7 - - 120.7
Long-term interest rate spread versus Bund (basis points) 566.1 378.8 283.8 178.2 125.8 234.5 - 93.3
Market funding ratio (%) 21.5 23.2 25.6 25.9 32.2 - 50.8 40.0
Green bonds issued to all bonds (%) 0.0 0.0 0.2 0.7 1.7 1.6 3.9 2.3
1-3 4-10 11-17 18-24 25-27 Colours indicate performance ranking among 27 EU Member States.
(1) Last data: Q3-2022.
(2) Data is annualized.
Source: ECB, Eurostat, S&P Global Capital IQ Pro.

households. Net lending to non-financial 2017 period, continued in 2022 with a 12.2%
corporations accelerated in 2022, registering an year-on-year increase by the fourth quarter. This
average annual growth rate of 8.3%, in increase was partly driven by foreign direct
comparison to 5.7% a year earlier. The pick-up in investment (FDI) linked to the country’s golden
lending was mainly driven by flows to large firms. visa programme. Price-to-rent and price-to-income
Lending to households continued to fall, as the ratios have also rebounded significantly. However,
increase in gross new lending to households was prices remain 18% below their peak 2008 levels,
more than offset by repayments of existing and net credit growth for mortgages is persistently
mortgages. The weighted average cost of bank negative. Moreover, new gross mortgage loan
lending to businesses has risen significantly since volumes are still much lower than in the pre-2009
August, reaching 4.6% in December 2022 period, despite steady growth over the past two
compared to 2.9% at end-2021. However, this is years. For commercial real estate, price growth for
still substantially lower than the weighted average the first 6 months of 2022 was less pronounced,
cost of bank lending to micro firms and individual at only 0.7% for offices and 2.5% for retail stores.
entrepreneurs (6.7%) and households (5.6%). The Overall, there are no indications of an
COVID-19 Enterprise Guarantee fund concluded its overvaluation of house prices that would require a
operations in June 2022, with a total of tighter macro-prudential policy stance, despite the
EUR 6.2 billion in loans disbursed since its real-estate market’s over-reliance on FDI flows.
inception in 2020. New lending programmes by The Bank of Greece has maintained the
the Hellenic Development Bank targeting small countercyclical capital buffer at zero.
and medium-sized enterprises (SMEs) will be
activated in late 2022 and 2023. Other EU The Greek capital market remains
financial instruments and European Investment underdeveloped, despite progress in recent
Bank programmes continue to account for a large years. The market-funding ratio has improved
part of SME lending by banks. Loan disbursements steadily since 2016 but remains low, reaching
linked to the RRF Loan Facility are showing good 32.2% in 2021 compared to an EU average of
progress and are expected to accelerate 50%. This low ratio led the authorities to recently
significantly as of 2023. All this should support draw up a national strategy to strengthen the
credit demand, which may nevertheless suffer in Greek capital market. The set-up of the equity
the short term from the worsening macroeconomic platform instrument of the RRF Loan Facility also
outlook. aims to provide equity financing to dynamic SMEs
and start-ups. After a decade of
The property market has seen continued underperformance, IPOs and bond-issuance
price growth on the back of foreign direct activity rebounded in 2021. The Athens stock
investment. The strong rebound in the price of exchange is still far from its pre-2008 levels, in
apartments, following the large fall in the 2008- terms of both market capitalisation and daily

72
turnover. The market-cap-to-GDP ratio was 27.2%
at the end of 2021, as opposed to an EU average
of 85.5%. Sustainable finance in Greece still lags
behind EU peers, despite a pick-up in green bond
issuance over the last two years. The FinTech
industry is in the early stages of development in
Greece, while banks are investing in digital and
mobile distribution channels and FinTech solutions,
often in partnership with local FinTechs.

The Greek insurance sector is highly

concentrated and smaller than its EU peers.
Total assets held by Greek insurers represented
8.8% of GDP as of 30 September 2022, compared
to an EU average of 58.3%, while the sector has
undergone some consolidation in recent years. The
solvency ratio at the end of September 2022
remained robust, albeit lower than the EU average.
The rising interest rates are expected to lead to
asset devaluations for Greek insurers, which
should be partly offset by reductions in the
amount of technical provisions. However, as
elsewhere in the EU, the higher-than-expected
inflation may generate short-term losses for non-
life business in Greece, due to increases in claim
costs, triggering the need for a rise in premiums to
counteract them. Greece has one of the highest
insurance protection gaps in Europe for natural
disasters, particularly earthquakes and
wildfires. (110)

(110) According to EIOPA’s dashboard on insurance protection gap

for natural catastrophes.

73
ANNEX 19: TAXATION
This Annex provides an indicator-based Recent reforms have lowered Greece’s labour
overview of Greece’s tax system. It includes tax burden, which is currently lower than the
information on the tax structure (the types of tax EU average at various wage levels. Graph
that Greece derives most of its revenue from), the A19.2 shows that the labour tax wedge for Greece
tax burden on labour, and the progressivity and in 2022 was lower than the EU average at various
redistributive effect of the tax system. It also wage levels. Second earners at a wage level of
provides information on tax collection and 67% of the average wage, whose spouses earn
compliance. the average wage, are subject to a tax wedge that
is also lower than the EU average. Greece is
Greece’s tax revenues remain close to the EU planning to further lower the tax wedge by
aggregate in relation to GDP. In terms of supressing the special solidarity contribution
structure, important steps have been taken since income tax surcharge for all employment and
2020 to improve the mix of revenues by reducing pension income from 2023. This cut follows
corporate and personal income tax and social temporary and permanent reductions in the social
security contribution rates. Compared to the EU contribution rates over recent years. Despite the
aggregate, tax revenues (expressed as % of GDP fact that the progressivity of the tax system is in
and as % of total taxation) in Greece in 2021 line with the EU average, the tax and benefit
tended to rely more on growth-friendly taxes (i.e. system reduces income inequality, as measured by
consumption taxes rather than labour taxes). the Gini coefficient, by less than the EU average in
Revenues from environmental taxes (expressed as 2021 (Table A19.1).
% of GDP) have increased significantly in recent
years. Greece's energy and transport tax revenues Greece is continuing to digitalise its tax
(expressed as total tax revenues) are significantly administration, with the aim to combat tax
above the EU aggregate (see Table A19.1). A new evasion, reduce tax arrears and reduce
green tax reform with the technical assistance of compliance costs for taxpayers. Outstanding
Commission's services is underway in order to tax arrears increased by 36.7 pps between 2019
support the green transition in Greece. Overall and 2020 to 228.3% of total net revenue, in line
revenues from taxes and social security with the EU trend for the same period and before
contributions (expressed as % of GDP) have been the implementation of recent measures. The
increasing since the global financial crisis, but impact of measures taken in light of the COVID-19
collection remains a challenge. pandemic to support taxpayers should be taken

Table A19.1: Taxation indicators

Greece EU-27
2010 2019 2020 2021 2022 2010 2019 2020 2021 2022
Total taxes (including compulsory actual social contributions) (% of
32.3 39.5 38.8 39.4 37.9 39.9 40.0 40.6
GDP)
Labour taxes (as % of GDP) 13.7 16.4 17.4 17.1 20.0 20.7 21.3 20.9
Consumption taxes (as % of GDP) 12.0 14.9 14.1 14.5 10.8 11.1 10.7 11.2
Tax structure
Capital taxes (as % of GDP) 6.6 8.2 7.3 7.7 7.1 8.1 8.0 8.5
Total property taxes (as % of GDP) 2.0 3.3 3.4 3.2 1.9 2.2 2.2 2.2
Recurrent taxes on immovable property (as % of GDP) 1.0 2.4 2.6 2.4 1.1 1.2 1.2 1.1
Environmental taxes as % of GDP 2.7 3.9 3.8 3.9 2.4 2.4 2.2 2.2
Tax wedge at 50% of average wage (Single person) (*) 34.4 32.6 32.1 29.9 29.7 33.9 32.3 31.9 32.1 31.7
Tax wedge at 100% of average wage (Single person) (*) 40.0 40.4 38.9 37.1 37.1 41.0 40.1 39.9 39.6 39.7
Progressivity &
Corporate income tax - effective average tax rates (1) (*) 23.0 23.0 21.0 19.5 19.4 19.1
fairness
Difference in Gini coefficient before and after taxes and cash social
5.5 4.2 4.4 3.7 8.6 7.7 8.1 7.8
transfers (pensions excluded from social transfers) (2) (*)
Outstanding tax arrears: total year-end tax debt (including debt
Tax administration & 191.5 228.3 31.6 40.7
considered not collectable) / total revenue (in %) (*)
compliance
VAT Gap (% of VAT total tax liability, VTTL) 23.4 19.7 11.0 9.1

(1) Forward-looking effective tax rate (OECD).

(2) A higher value indicates a stronger redistributive impact of taxation.
(*) EU-27 simple average
For more data on tax revenues as well as the methodology applied, see European Commission, Directorate-General for Taxation
and Customs Union, Taxation trends in the European Union: data for the EU Member States, Iceland, Norway and United Kingdom:
2021 edition, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2778/843047 and the Data on
Taxation webpage, https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. For more
details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in the EU: report
2022, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2778/109823.
Source: European Commission, OECD.

74
Graph A19.1: Tax revenues from different tax types as % of total taxation

Tax revenue shares in 2021, Greece (outer ring) Environmental and property taxation as % of
and the EU (inner ring) total tax revenue, Greece and the EU
12 0.16
19.57 10
2.06
8
0.19 2.02
6
1.00
4 7.76 2.75
21.01 6.07
43.54 2 4.32
2.64
51.43 0
27.54 Greece - EU - Greece - property EU - property
environmental environmental taxation taxation
taxation taxation
36.89
Energy taxes Transport taxes
Resource/pollution taxes Recurrent property taxes
Taxes on labour Taxes on consumption Taxes on capital Other property taxes

Source: European Commission

duly into account in interpreting these figures. The

VAT gap (the gap between revenues actually
collected and the theoretical tax liability) remains
high but declined from 23.4% in 2019 to 19.7% in
2020. However, it remained well above the EU-
wide gap of 9.1%. Moreover, when analysing the
drivers behind the improvement in the VAT gap in
the recent years, the loss of revenues from
reduced rates and exceptions more than offset the
improvements in compliance. To improve tax
compliance, the Greek RRP includes specific
measures for the modernisation and digitalisation
of the tax administration, including tax collection
and incentives to increase electronic transactions.
The digitalisation of tax audits and controls could,
when combined with the planned acceleration of
VAT refunds, improve tax collection.

Graph A19.2: Tax wedge for single and second

earners as a % of total labour costs, 2022
45
Tax wedge, % of total labour costs

42.2
40

33.7 37.1
35
32.5
30 29.7
25

20
50 100 150
Earnings in % of the average wage

Single earner - EL Single earner - EU average

Second earner - EL Second earner - EU average

Second earner tax wedge assumes first earner at 100% of

the average wage and no children.
Source: European Commission

75
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS

Table A20.1: Key economic and financial indicators

forecast
2004-07 2008-12 2013-19 2020 2021 2022 2023 2024
Real GDP (y-o-y) 3.6 -5.5 0.3 -9.0 8.4 5.9 2.4 1.9
Potential growth (y-o-y) 3.0 -1.0 -1.7 -0.8 -0.3 0.4 1.0 1.5

Private consumption (y-o-y) 3.4 -4.3 0.2 -7.7 5.8 7.8 1.6 1.4
Public consumption (y-o-y) 5.1 -3.3 -1.1 2.6 2.2 -1.6 -0.2 -1.4
Gross fixed capital formation (y-o-y) 5.8 -17.7 -0.9 1.1 20.0 11.7 7.2 6.0
Exports of goods and services (y-o-y) 9.3 -1.9 5.3 -21.5 24.1 4.9 6.5 5.2
Imports of goods and services (y-o-y) 8.3 -7.8 4.4 -7.3 17.7 10.2 4.7 3.8

Contribution to GDP growth:

Domestic demand (y-o-y) 4.6 -7.0 -0.2 -4.7 6.9 6.5 2.1 1.6
Inventories (y-o-y) -0.3 -0.7 0.3 1.3 0.8 2.4 -0.1 -0.1
Net exports (y-o-y) -0.8 2.1 0.2 -5.6 0.7 -3.0 0.5 0.4

Contribution to potential GDP growth:

Total Labour (hours) (y-o-y) 0.7 0.9 -0.2 -0.7 -0.7 -0.3 0.1 0.3
Capital accumulation (y-o-y) 0.9 0.1 -0.4 -0.3 -0.1 0.0 0.1 0.2
Total factor productivity (y-o-y) 1.3 -2.0 -1.1 0.2 0.5 0.7 0.8 0.9

Output gap 1.7 -8.3 -12.5 -13.8 -6.3 -1.1 0.3 0.8
Unemployment rate 9.7 14.7 23.2 17.6 14.7 12.5 12.2 11.8

GDP deflator (y-o-y) 3.1 1.5 -0.6 -0.9 1.3 8.1 4.7 2.9
Harmonised index of consumer prices (HICP, y-o-y) 3.2 2.9 -0.1 -1.3 0.6 9.3 4.2 2.4
HICP excluding energy and unprocessed food (y-o-y) 3.2 2.0 -0.1 -1.0 -0.7 5.7 5.7 2.5
Nominal compensation per employee (y-o-y) 5.1 -0.9 -2.8 -0.6 2.3 0.3 3.6 2.8
Labour productivity (real, hours worked, y-o-y) 1.7 -3.5 -0.5 2.6 -1.4 0.3 1.1 1.1
Unit labour costs (ULC, whole economy, y-o-y) 3.1 2.8 -1.8 7.2 -3.1 -1.7 1.9 1.5
Real unit labour costs (y-o-y) 0.0 1.3 -1.1 8.2 -4.3 -9.1 -2.6 -1.3
Real effective exchange rate (ULC, y-o-y) 1.4 0.6 -3.0 2.9 -3.3 -5.3 -3.6 -2.0
Real effective exchange rate (HICP, y-o-y) 0.8 0.2 -0.5 -0.3 -1.1 -0.3 . .

Net savings rate of households (net saving as percentage of net disposable

income) -0.7 -6.8 -13.2 -5.1 -3.2 . . .
Private credit flow, consolidated (% of GDP) 14.4 1.8 -2.2 5.1 -0.1 . . .
Private sector debt, consolidated (% of GDP) 88.7 125.6 124.5 124.9 120.7 . . .
of which household debt, consolidated (% of GDP) 38.1 59.2 60.9 59.5 55.5 . . .
of which non-financial corporate debt, consolidated (% of GDP) 50.6 66.5 63.6 65.4 65.2 . . .
Gross non-performing debt (% of total debt instruments and total loans and . 9.1 35.0 22.2 7.1 . . .
advances) (1)

Corporations, net lending (+) or net borrowing (-) (% of GDP) 5.1 7.2 6.5 2.3 0.9 -0.5 -0.4 -0.1
Corporations, gross operating surplus (% of GDP) 19.0 18.0 16.6 15.0 16.9 18.6 18.9 19.0
Households, net lending (+) or net borrowing (-) (% of GDP) -7.9 -4.7 -4.0 1.7 1.2 -5.0 -4.1 -3.7

Deflated house price index (y-o-y) 4.6 -6.5 -1.9 5.7 6.6 3.3 . .
Residential investment (% of GDP) 9.9 5.6 1.0 1.1 1.3 1.6 . .

Current account balance (% of GDP), balance of payments -10.8 -10.0 -1.6 -6.6 -6.8 -9.7 -7.3 -6.0
Trade balance (% of GDP), balance of payments -9.1 -7.2 -1.3 -6.8 -7.6 -9.4 . .
Terms of trade of goods and services (y-o-y) -0.1 -0.3 0.8 -0.8 -1.1 4.6 1.9 1.0
Capital account balance (% of GDP) 1.4 1.2 0.8 1.7 2.2 1.5 . .
Net international investment position (% of GDP) -79.7 -94.2 -140.8 -173.8 -171.9 -141.3 . .
NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2) . -96.2 -130.6 -155.1 -150.2 -118.2 . .
IIP liabilities excluding non-defaultable instruments (% of GDP) (2) . 189.9 240.3 300.8 304.8 260.2 . .
Export performance vs. advanced countries (% change over 5 years) 12.7 -5.1 -8.0 -10.2 14.6 . . .
Export market share, goods and services (y-o-y) 0.9 -5.9 1.1 -19.7 20.1 1.0 3.8 1.4
Net FDI flows (% of GDP) 0.1 -0.1 -1.3 -1.4 -2.4 -2.2 . .

General government balance (% of GDP) -6.9 -11.3 -2.9 -9.7 -7.1 -2.3 -1.3 -0.6
Structural budget balance (% of GDP) . . 5.0 -3.1 -4.7 -2.2 -1.5 -1.0
General government gross debt (% of GDP) 104.2 144.2 180.3 206.3 194.6 171.3 160.2 154.4
(1) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches.
(2) Net international investment position (NIIP) excluding direct investment and portfolio equity shares.
Source: Eurostat and ECB as of 2 May 2023, where available; European Commission for forecast figures (Spring forecast 2023).

76
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS
This Annex assesses fiscal sustainability action (114). At the same time, the baseline
risks for Greece over the short, medium and projections up to 2033 benefit from a still
long term. It follows the same multi-dimensional favourable snowball effect until 2030, notably
approach as the European Commission’s 2022 thanks to the impact of Next Generation EU
Debt Sustainability Monitor, updated based on the (NGEU), with real GDP growth at around 0.8% of
Commission 2023 spring forecast. GDP over 2025-2033. Government gross financing
needs are expected to remain broadly stable over
1 - Short-term risks to fiscal sustainability the projection period; they are projected at around
are low overall. The Commission’s early- 11.5% on average over the projection period,
detection indicator (S0) does not signal major slightly above the level forecast for 2024.
short-term fiscal risks (Table A21.2) (111).
Government gross financing needs are expected to The baseline projections are stress-tested
decrease to around 10% of GDP in the short term against four alternative scenarios to assess
(i.e. over 2023-2024) (Table A21.1, Table 1). the impact of changes in key assumptions
Greece’s sovereign credit rating has been steadily (Graph 1). For Greece, reverting to historical fiscal
improving but remains below investment grade trajectories under the ‘historical structural primary
reflecting the financial markets’ perceptions of balance’ scenario would support the reduction of
sovereign risk. the government debt ratio. If the SPB gradually
converged its historical 15-year average (3.3% of
2 - Medium-term fiscal sustainability risks GDP), the projected debt-to-GDP ratio would be
appear high overall. about 8 pps. lower than in the baseline in 2033. A
permanent worsening of the macro-financial
The DSA for Greece, under the baseline, conditions, as reflected under the ‘adverse
shows that the government debt-to-GDP interest-growth rate differential’ scenario (i.e. 1 pp.
ratio is expected to decline but remain at a higher than the baseline) would result in a
high level over the medium term (at 126.1% persistently higher government debt-to-GDP ratio,
by around 10% of GDP by 2033, as compared with
in 2033) (Graph 1) (112) (113). The assumed
the baseline. A temporary worsening of financial
structural primary balance (SPB) (a surplus of
conditions, as reflected in the ‘financial stress
2.1% of GDP) supports these developments, and it
‘scenario (i.e. temporarily increase of interest rates
appears ambitious compared with past fiscal
by 5.9 pps.), would lead to a slightly higher public
performance, suggesting limited room for policy
debt-to-GDP ratio by 2033 (around +9% of GDP)
compared with the baseline. The ‘lower structural
(111) The S0 is a composite indicator of short-term risk of fiscal primary balance’ scenario (i.e. the forecast
stress. It is based on a wide range of macro-financial and improvement in the SPB over 2023-2024 is
fiscal variables that have proven to perform well in the past
reduced by half of the cumulative forecast
in detecting situations of upcoming fiscal stress.
change) would also lead to a significantly higher
(112) The assumptions underlying the Commission’s ‘no-fiscal government debt-to-GDP ratio by 2033 (about
policy change’ baseline notably comprise: (i) a structural
primary surplus, before ageing costs, of 2.1% of GDP as of +11% of GDP) compared with the baseline.
2024; (ii) inflation converging linearly towards the 10-year
forward inflation-linked swap rate 10 years ahead (which Stochastic projections show a medium
refers to the 10-year inflation expectations 10 years from sensitivity of these projections against
now); (iii) the nominal short- and long-term interest rates on
new and rolled over debt converging linearly from current plausible unforeseen events (115). These
values to market-based forward nominal rates by T+10; (iv) stochastic simulations point to a 10% probability
real GDP growth rates from the Commission 2023 spring
forecast until 2024, followed by EPC/OGWG ‘T+10
methodology projections between T+3 and T+10 (average of (114) This assessment is based on the consolidation space
0.8%); (v) ageing costs in line with the 2021 Ageing Report indicator, which takes into account all available data from
(European Commission, Institutional Paper 142, November 1980 to 2021. The structural primary balance of +2.1% of
2020). For information on the methodology, see the 2022 GDP would be considered much less ambitious if compared
Debt Sustainability Monitor. with a shorter time horizon, for instance of the last 15 years.
(113) Table 1 shows the baseline debt projections and its (115) The stochastic projections show the joint impact on debt of
breakdown into the primary balance, the snowball effect (the 2000 different shocks affecting the government’s budgetary
combined impact of interest payments and nominal GDP position, economic growth, interest rates and exchange rates.
growth on the debt dynamics) and the stock-flow This covers 80% of all the simulated debt paths, therefore
adjustment. excluding tail events.

77
of the debt ratio in 2027 being greater than in reduces the fiscal space (contribution of +2.0% of
2022, entailing medium risk given the initial high GDP) (Table A21.1, Table 2). This assessment is
level of debt. In addition, such shocks point to conditional to the country maintaining a high
substantial uncertainty (i.e. the difference between structural primary balance over the long term.
the 10th and 90th debt distribution percentiles)
surrounding the government debt baseline Finally, several additional risk factors need
projections (Graph 2). to be considered in the assessment. On the
one hand, risk-increasing factors are related to the
3 - Long-term fiscal sustainability risks for recent increase in interest rates, in particular the
Greece appear low overall (116). state guarantees granted recently, also in the
context of the COVID-19 crisis. Significant
The S2 indicator points to low fiscal contingent liability risks continue to stem from the
sustainability risks. The indicator shows that, still relatively high share of non-performing loans
relative to the baseline, the SPB would not need to in the banking sector (although the share of non-
improve to ensure debt stabilisation over the long performing loans witnessed a sharp reduction in
term. This result is underpinned by the projected the previous years), and the costs linked to
decrease in ageing-related costs (contribution pending legal cases against the state also pose
of -1.8% of GDP) and a favourable initial fiscal risks. On the other hand, risk-mitigating
budgetary position (-0.9% of GDP). Ageing costs’ factors are related to the structure of the debt. In
developments are primarily driven by the projected particular, the major share of debt is held by
decrease of public pension expenditure official lenders at low interest rates and has a
(contribution of -1.9% of GDP), which is only partly particularly long maturity structure compared with
offset by the projected increase in health care peer countries. The currency denomination of debt
spending (contribution of +0.6% of GDP) also mitigates risks. In addition, the structural
(Table A21.1, Table 2). reforms under the NGEU/RRF, if fully implemented,
could have a further positive impact on GDP
When combined with long-term debt growth in the coming years, and therefore help to
vulnerabilities, as highlighted by the S1 mitigate debt sustainability risks.
indicator, overall long-term risks are
assessed as low. Indeed, the S1 sustainability
gap indicator (at -1.5% of GDP) signals that the
country doesn’t need to further improve its fiscal
position to reduce its debt to 60% of GDP by
2070. This result is mainly driven by the current
very favourable initial budgetary position
(contribution of -2.4 pps.) and the projected
decline in ageing-related public spending
(contribution by -1.1% of GDP). However, the
current distance of the Greek government debt
ratio from the 60% reference value partially

(116)The S2 fiscal sustainability indicator measures the

permanent SPB adjustment in 2024 that would be required
to stabilise public debt over the long term. It is
complemented by a revised S1 indicator, which measures the
fiscal gap in 2024 to bring the debt-to-GDP ratio to 60% in
the long term. For both S1 and S2 indicators, the risk
assessment depends on the amount of fiscal consolidation
needed: ‘high risk’ if the required effort exceeds 6 pps. of
GDP, ‘medium risk’ if it lies between 2 pps. and 6 pps. of
GDP, and ‘low risk’ if the effort is negative or below 2 pps. of
GDP. The overall long-term risk classification brings together
the risk categories derived from S1 and S2. S1 may notch up
the risk category derived from S2 when it signals a higher
risk than S2. See the 2022 Debt Sustainability Monitor for
further details.

78
Table A21.1: Debt sustainability analysis - Greece
Table 1. Baseline debt projections 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Gross debt ratio (% of GDP) 206.3 194.6 171.3 160.2 154.3 149.2 144.8 140.2 135.1 130.4 126.1 122.1 118.3 126.1
Changes in the ratio 25.7 -11.7 -23.3 -11.0 -5.9 -5.1 -4.4 -4.6 -5.1 -4.7 -4.3 -4.0 -3.8 7.8
of which
Primary deficit 6.7 4.7 -0.1 -1.9 -2.5 -2.6 -2.7 -2.7 -2.7 -2.7 -2.8 -2.7 -2.7 -2.9
Snowball effect 22.6 -16.0 -22.2 -8.3 -4.3 -2.9 -2.2 -1.6 -1.3 -0.8 -0.4 0.0 0.2 -0.1
Stock-flow adjustments -3.6 -0.4 -0.9 -0.8 1.0 0.4 0.3 -0.6 -1.1 -1.2 -1.2 -1.2 -1.3 10.8
Gross financing needs (% of GDP) 17.8 18.9 13.3 9.6 11.0 10.0 11.3 11.5 11.6 11.5 11.8 12.0 11.6 13.8

% of GDP Graph 1. Deterministic debt projections % of GDP Graph 2. Stochastic debt projections 2023-2027
220 220
210
200 200
180 190
180
160 170 p90
160 p80
140 150
p60
140
120 130 p40
120 p20
100 p10
110
80 100
90
60 80
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2020 2021 2022 2023 2024 2025 2026 2027
Historical SPB scenario Lower SPB scenario
Financial stress scenario Adverse 'r-g' scenario Median Baseline
Baseline

Table 2. Breakdown of the S1 and S2 sustainability gap indicators

S1 S2
Overall index (pps. of GDP) -1.5 -2.8
of which
Initial budgetary position -2.4 -0.9
Debt requirement 2.0
Ageing costs -1.1 -1.8
of which Pensions -1.2 -1.9
Health care 0.5 0.6
Long-term care 0.0 0.0
Others -0.4 -0.5
Source: Commission services.

Table A21.2: Heat map of fiscal sustainability risks - Greece

Short term Medium term - Debt sustainability analysis (DSA) Long term
Deterministic scenarios
Overall Stochastic Overall
Overall Historical Lower Adverse Financial S2 S1
(S0) Baseline projections (S1 + S2)
SPB SPB 'r-g' stress
Overall HIGH HIGH HIGH HIGH HIGH MEDIUM
Debt level (2033), % GDP 126.1 118.2 137.2 136.3 135.0
LOW HIGH Debt peak year 2022 2022 2022 2022 2022 LOW LOW LOW
Fiscal consolidation space 23% 22% 38% 23% 23%
Probability of debt ratio exceeding in 2027 its 2022 level 10%
Difference between 90th and 10th percentiles (pps. GDP) 57.7

(1) Debt level in 2033. Green: below 60% of GDP. Yellow: between 60% and 90%. Red: above 90%. (2) The debt peak year indicates whether debt is projected to increase overall over the next decade.
Green: debt peaks early. Yellow: peak towards the middle of the projection period. Red: late peak. (3) Fiscal consolidtation space measures the share of past fiscal positions in the country that were more
stringent than the one assumed in the baseline. Green: high value, i.e. the assumed fiscal position is plausible by historical standards and leaves room for corrective measures if needed. Yellow:
intermediate. Red: low. (4) Probability of debt ratio exceeding in 2027 its 2022 level . Green: low probability. Yellow: intermediate. Red: high (also reflecting the initial debt level). (5) the difference
between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.

Source: Commission services.

79
ANNEX 22: MACROECONOMIC IMBALANCE PROCEDURE ASSESSMENT MATRIX
The Macroeconomic Imbalance Procedure Hercules scheme has strongly contributed to the
matrix presents the main elements of the in- clean-up of banks’ balance sheets and to the
depth review undertaken for Greece (117). development of the secondary NPL market, while
Greece was selected for an in-depth review in the the impact of other reforms is gradually
2023 Alert Mechanism Report. This in-depth materializing. Efforts to step up tax collection and
review on the prevention and correction of to reinforce payment discipline, in conjuntion with
macroeconomic imbalances presents the main the moderation of energy prices, which lowered
findings on the gravity and evolution of the the fiscal cost of the energy support measures,
challenges identified, as well as policy responses contributed to a better than expected fiscal
and potential policy needs. Findings cover all areas primary balance already in 2022. On the labour
of vulnerability assessed in the in-depth review. market front, measures to enhance job creation,
improve job quality and invest in learning and
Greece’s long standing vulnerabilities education have started to benefit the resilience of
relating to high public debt and a high stock the job market.
of non-performing loans in the context of
Going forward, the country’s imbalances are
high unemployment have been receding, but
projected to continue their correction
its external position is deteriorating. Greece
continues to face fiscal sustainability risks, and an supported by economic growth, although
increased level of public debt, which, however, Greece would benefit from further policy
remains on a downward trajectory. The ratio of action. Greece’s fiscal policy objectives target at
non-performing loans (NPL) dropped significantly maintaining primary surpluses in 2023 and
in 2022, but still remains high, while a large beyond. Further measures would contribute to
amount of legacy non-performing private debt is addressing imbalances. These include inter alia,
in the hands of credit servicers and thus remains enlarging the tax base and strenghtening tax
in the economy. The current account balance compliance, including by introducing a
deteriorated further, to -11.8% of GDP in 2022, comprehensive advance tax ruling system.
primarily as a result of declines in trade of both, Safeguarding the efficiency of the public
the energy and non-energy goods. Greece’s stock administration can attract the right skills, while
of net external liabilities remains high, mainly maintaining its human resource costs at pre-
composed of public debt instruments held by pandemic levels. Enhancing the efficiency of
official sector creditors. At the same time, Greece’s healthcare and long-term care spending.
economy recorded a significant private Accelerating the reduction of non-performing
consumption and investment growth during its loans held by banks and credit servicers, by
recovery from the pandemic. This translated into improving debt enforcement and the functioning
faster growth in domestic demad than in output in of the non-performing loan secondary market.
2022, leading to a widening trade deficit. Despite Further measures could be considered to improve
the fact that the labour market has absorbed the the business environment. Labour market
slack it accumulated during the pandemic, the activation support could be made more effective,
unemployment rate remains among the highest in with a particular focus on young people and
the EU, disproportionally affecting the youth and women. Further policy actions, including on the
women. fiscal side, should ensure that external balances
are put on firmly improving path, while promoting
The authorities continue to take relevant balanced growth. Investment spending should be
measures to facilitate economic adjustment, carefully focussed on productive investment, to
including in the context of the Recovery and ensure the sustainability of the country’s
Resilience Plan (RRP) implementation. On the borrowing.
financial sector front, efforts continue to address
Based on this assessment, the Commission
relevant deficiencies. The recently phased out
considered in its communication European
Semester – 2023 Spring Package (COM(2023)
(117) European Commission (2023), In-Depth Review for Greece, 600 final) that Greece continues to
Commission staff working document (COM(2023) 631 final),
in accordance with Article 5 of Regulation (EU) No experience excessive imbalances.
1176/2011 on the prevention and correction of
macroeconomic imbalances.

80
Table A22.1: Assessment of macroeconomic imbalances matrix
Gravity of the challenge Evolution and prospects Policy response
Unsustainable trends, vulnerabilities and associated risks
Public debt Greece has a high level of public debt, The debt-to-GDP ratio dropped by almost Some policy progress has been made to
amounting to over 171% of GDP in 2022. 25 pps. in 2022, compared to 2021, on address the identified public debt
The Commission’s fiscal sustainability the back of the strong increase of nominal vulnerabilities, but futher efforts seem
assessment shows that Greece faces high GDP and is expected to decrease further in warranted. Greece reached high primary
fiscal sustainability risks over the medium 2023 to 160.2% of GDP and 154.4% in surpluses in the years before the
term and low ones in the long run. 2024, also reflecting the improvement of pandemic, which were restored in 2022
Greece’s debt is largely extended to the primary fiscal balance. Interest and are envisagead to remain in 2023
official creditors at long maturities and spending going forward will benefit from and beyond. Actions to strengthen tax
concessional rates, which – together with limited risks due to the majority of collection and compliance have
the large cash buffer – insulates Greek creditors being official lenders holding contributed to this positive development,
public finances from short-term debt at concessional rates. including under the RRP, but further
fluctuations. efforts are needed.

Financial sector The banking sector is burdened by a high, Rising interest rates and prices risk The policy setting is overall consistent
albeit considerably reduced, non eroding borrowers’ debt repayment with an improvement in financial sector
performing loans ratio (6.4% in capacity, posing a risk for banks’ asset stability. The recently phased out Hercules
September 2022). Banks’ core profitability quality. Although subject to downside scheme strongly contributed to the clean-
has improved and supports the banks’ risks, banks’ improved profit outlook is up of banks’ balance sheets, while the
capital position, which remains the lowest expected to assist a gradual restoration of impact of other reforms is gradually
in the euro area (16.2% as of September capital ratios. It is supported by lower materializing. The use of out-of-court
2022). The quality of capital remains impairments, given the strong fall in non- restructurings by banks and borrowers has
weak and the link to the Greek sovereign performing loans, as well as new lending picked up but remains modest. The
persists. In addition, a large amount of and higher interest rate margins. However, clearance of the dual backlogs of
legacy non-performing debt is now in the they face funding cost increases, while household insolvency cases and called
hands of servicers and its workout any deterioration in asset quality or state guarantees has accelerated. The
remains a challenge for the economy. retrenchment in credit demand would number of e-auctions has risen to the
While domestic government bond holdings pose challenges for their profitability. highest number in years, while the still
are significant, banks have largely high share of failed auctions is slowly
protected their balance sheet from improving, partly as a result of past policy
sovereign yield volatility by valuing 84% actions.
of their sovereign portfolio at amortised
cost and applying hedging strategies.

External The large current account deficit The current account deficit is forecast to Some policy progress has been made in
sustainability deteriorated further reaching 11.8% of improve in 2023 to 9.2% of GDP in 2023 response to external sustainability and
and GDP in 2022, and remains much larger and 7.8% in 2024, while the net competitiveness vulnerabilities. However,
competitiveness than before the pandemic. A key driver international investment position is emergy measures taken to address the
was a faster growth of domestic demand expected to remain broadly unchanged in energy crisis supported buoyant domestic
compared to economy’s output. The 2023 and 2024. demand. The phase-out of these
balance of trade in energy goods also measures throughout 2023 are expected
deteriorated markedly on the back of to reduce the stimulus to domestic
surging energy prices. The current account demand, although further action would be
levels are below what would be required needed to ensure that domestic demand
to stabilise Greece’s net international growth is more in line with output to
investment position, which improved in facilitate sustainable external deficits.
2022 and stood at -141% of GDP. The
liabilities are mainly composed of public
debt instruments held by official creditors.
Potential growth Potential GDP growth has been negative Investment, also supported by the funds A series of measures to enhance the
and productivity since 2010, on account of weak total under the RRP that is currently being growth potential and incentivise
factor productivity growth, declining implemented, is expected to yield productivity growth are envisaged, mainly
capital stock and an erosion of the significant gains in the following years. in the context of the RRP. Further
country’s human capital. The large share According to Commission’s estimates, an measures could be considered to improve
of micro and small businesses is an increase in GDP growth of 2.1 to 3.3 pps the business environment, for instance by
aggravating factor as most small and over the period 2021-2026 is expected completing the cadastre project and
medium-sized enterprises struggle with from the combined effect of the RRP expediting the environmental permitting
regulatory barriers and access to finance. grants and loans is expected, without procedures.
considering the potential positive impact
from the structural reforms. This is
reflected in the potential growth turning
positive in 2022 and estimated at 1.0%
and 1.5% in 2023 and 2024.
Labour market At 12.5% in 2022, unemployment remains Unemployment has been decreasing The labour market is expected to benefit
and among the highest in the EU and it almost steadily since mid-2013, including from the various measures of Greece’s
unemployment disproportionally affects the youth during the pandemic. It is expected to RRP, including from a sizeable increase in
(24.2%) and women (15.2%). Long-term decrease further in 2023. Employment activation programmes and the
unemployment (9.2% in 2021) is also has fully recovered the losses it suffered administrative upgrading of the Greek
among the highest in the EU. Despite during the pandemic, standing almost 6 public employment service. Nevertheless,
gradually increasing, the employment rate pps. above its pre-pandemic level, and is there remains scope to further increase
stood at 66.1% in Q3 2022, 8.6 expected to increase further in 2023, also the employability of young people and
percentage points below the EU average. supported by the RRP implementation and women who face higher unemployment
the continued good performance in the rates.
tourism sector.

Source: European Commission

81
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