Greeks Face Challenges in Affording Summer Vacations Despite Economic Upturn -

Vera Kalogera’s summers as a child were markedly different from those of today. Raised in Athens, her family would flee the city’s noise for island getaways, joining other families for their annual holidays by the Aegean or Ionian seas—a fundamental tradition of Greek family culture.

Now 35 and a mother, Kalogera finds such vacations financially unfeasible, and even brief trips to Greece’s renowned holiday spots seem out of reach.

“The situation regarding groceries, energy, and rent is worse than it has been in previous years,” Kalogera lamented, a teacher living in one of the more affluent northern suburbs of Athens. “We’ve significantly cut down on all non-essential expenditures.”

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Although Greece’s recovery from its economic crisis over the last decade has received applause from eurozone partners and investors, this uplifting narrative conceals a genuine drop in living standards—one that leaves even relatively well-off Greeks struggling to benefit from the recovery.

The cost of living is affecting populations throughout Europe, heightened by skyrocketing energy and food prices stemming from unrest in the Middle East. However, Greece stands out for the gap between its economic progress and the everyday experiences faced by households.

Visitors at Edem beach near Athens. A popular summer destination for those in the Greek capital. Image: Hilary Swift/Bloomberg

Greece is experiencing faster growth compared to many European countries, maintaining a budget surplus, and is predicted to shed the title of the continent’s most indebted nation by next year.

However, inflation remains among the highest in the eurozone, with the average annual salary around €18,000 ($20,850)—less than half of the EU average.

Read: Greece tries first 30-year debt sale since 2008 financial crisis

Together with Bulgaria, Greece ranks low in the EU regarding per-capita gross domestic product and purchasing power, with the highest percentage of individuals at risk of poverty or social exclusion following its northern neighbor.

As elections approach next summer—projected by polls to yield inconclusive results—Prime Minister Kyriakos Mitsotakis has prioritized reconciling these contrasting metrics as a central aim for his government.

‘How much does it cost?’

The government has already implemented significant tax reductions and most recently unveiled various initiatives to alleviate energy and grocery prices due to the conflict in Iran.

Despite this, a poll aired on Alpha TV on June 16 revealed that only 7% of respondents felt their financial situations had improved last year.

Prime Minister Mitsotakis remarked this month that the ongoing economic growth, currently at 2% annually, should positively influence daily life. “Improvements in macroeconomic indicators must translate into real benefits for everyone,” he claimed.

Recently, the administration introduced a website and application titled “How much does it cost?” enabling users to compare prices daily for 8,700 products, including food and baby items.

Read: Greece offers pension savings, tax increases to maintain euro

While the data is still being refined, Mitsotakis highlighted that Greek consumers now possess another resource in their battle against escalating costs.

The app reveals that many products are priced higher than in wealthier European nations, while some are more affordable.

For instance, the lowest price for a popular men’s roll-on deodorant was €2.71—almost a euro more expensive than in the UK—but comparable to average prices in Germany. Interestingly, some local products, like yogurt, cost more in Greek supermarkets.

A mix of pandemic-driven supply chain issues and conflicts in Ukraine and the Middle East has inflated prices globally. In Greece, a housing deficit complicates matters.

According to the latest available data, Greeks spend an average of 35.5% of their household income on housing costs in 2024. For nearly one-third of households, this percentage exceeds 40%, more than three times the EU average.

One contributing factor is the limited construction and lack of real estate investment following Greece’s economic crisis in 2010, according to Nikos Vettas, director general of the Foundation for Economic and Industrial Research, a Greek economic research institute. This trend has only started to shift in the past five years.

“This illustrates a supply lag that’s worsening as supply isn’t keeping up with population trends,” Vettas noted.

“While a nationwide housing shortage isn’t apparent, there’s a deficit of homes in certain regions that meet specific criteria and dimensions.”

Kalogera represents the demographic that Mitsotakis’s center-right New Democracy party seeks. After recently welcoming her first child, she and her husband looked for a larger home. They consider themselves fortunate to manage it, although their monthly expenses remain tight.

“We struggled to locate a decent house for under €1,000,” she said, a price point that many would find prohibitive. Although Greece’s minimum wage has increased by over 40% since 2019, it is still only €920 per month.

Read: Euro zone backs €1bn payout for Greece

Mitsotakis casting his vote during parliamentary elections in June 2023. Greece’s Prime Minister faces an election by next June, and the fragmented political landscape may complicate government formation. Image: Konstantinos Tsakalidis/Bloomberg

The economic crisis deprived Greece of nearly a quarter of its GDP, significantly reshaping the lifestyle of a country that had long lived beyond its means. Implementing fiscal discipline and restoring financial health has come at a considerable cost.

Currently, real wages, adjusted for inflation, remain well below 2009 levels.

Even though household income has increased due to job creation and a 12% wage rise from 2019 to 2024, consumer prices have surged over 16% in the same period.

Read: Greece eyes new reforms

“Rising costs in housing, food, and energy have placed enormous strain on various demographics, and there’s scant hope for relief in the near future,” Vettas observed.

Hidden legacy: Tax evasion

However, spending habits tell a more intricate story, pointing to another legacy of Greece’s crisis: tax evasion.

Greeks often spend more than citizens in six out of the 27 EU countries, suggesting that there are funds circulating in other areas. According to Bank of Greece Governor Yannis Stournaras, tax evasion accounts for 20-21% of Greece’s GDP, compared to 15-17% in other European nations.

Moreover, there are concerns regarding the pace at which businesses are increasing prices, noted lawyer Dionisis Alevromageiras.

The 44-year-old runs his own law practice and is also struggling to maintain his lifestyle, cutting back on entertainment and clothing expenses.

Read: EU executive says new corporate tax would target below 0.2% of turnover

“The real challenge is the lack of thorough market audits and the continuous rise in prices,” Alevromageiras stated. “Auditors must conduct rigorous inspections of businesses.”

Price increases have also been spurred by crucial Greek sectors. Tourism, contributing a fifth of GDP, consistently breaks revenue records, which in turn inflates rents and prices for goods and services, especially on Greek islands.

Tourist guidebooks for sale at a souvenir shop in Fira, Santorini. This island is among the most favored by international tourists and is increasingly becoming unaffordable for many Greeks. Image: Jose Sarmento Matos/Bloomberg

For Kalogera, this transition signifies a more extensive change in societal expectations across Europe—where her generation envisioned superior living conditions than their parents’, and that her child would enjoy an even better standard of living.

Taking a holiday similar to her childhood now feels like a distant fantasy. She fondly recalls a summer excursion to the Greek island of Samos, followed by a visit to Zakynthos in the Ionian Sea.

“I remember staying at hotels with two or three swimming pools, swimming in the sea in the morning and in the pool by afternoon,” she reminisced. “We dined outside three times a day. Now, dining out has become a rare choice.”