TheEconomistOctober 5th 2019 631T
he airportat Hellinikon, a few miles
south of Athens, closed in 2001. Planes
belonging to Greece’s now-defunct nation-
al carrier still litter the runway. Nearby a
stadium built for the Olympics in 2004
gently crumbles. In the distance, a marina
borders the glistening Aegean. In 2011,
when Greece was in the throes of a sover-
eign-debt crisis, the government put the
site, which is three times as large as Mona-
co, up for sale. In 2014 it was snapped up by
a consortium that planned to build homes,
hotels and a casino. At an expected cost of
some €8bn ($8.7bn), it was Greece’s largest
investment project.
Five years on, ground has yet to be bro-
ken. When Syriza, a left-wing party, formed
the government in 2015, it reopened the
terms of the sale. Ambivalent ministers
held up licences. The authorities demand-
ed numerous archaeological surveys. Lo-
cals sued. Apart from boats docking in the
marina and the occasional security guard
on patrol, the site now lies desolate.
Officials from the imfand European
Union who flew into Athens’s new airport
in September are thus not short of exam-
ples of the difficulties of doing business in
Greece. When the sovereign-debt crisis
struck they bailed the country out on con-
dition that it enact deep fiscal cuts and far-
reaching regulatory reforms. Last year the
eu struck a debt-relief deal, allowing
Greece to exit its third and final bail-out,
despite a public-debt burden of 180% of
gdp. It required Greece to continue with re-
forms while hitting eye-watering targets
for the primary-budget surplus (that is, be-
fore interest payments) of 3.5% until 2022,
and then 2.2%, on average, all the way to- In return it offered some interest-
rate relief and extended the maturity of
some loans.
The centre-right government led by
New Democracy, which took over from Syr-
iza in July, is preparing to present a draft
budget to parliament on October 7th. The
process of assessing those plans against
that debt deal has begun. A primary surplus
of 3.5% this year appears to be in the bag.
But the government hopes to negotiate le-
niency next year so that it has fiscal space
to cut taxes. Wrapping up its annual mis-
sion to Greece on September 26th, the imf
blessed lower fiscal targets, pointing to the
damage austerity had inflicted on public
investment and social spending.
Kyriakos Mitsotakis, the prime minis-
ter, wants to transform Hellinikon into a
symbol not of the hurdles to doing busi-
ness in Greece, but of the country’s new
openness to commerce. Permits have been
fast-tracked, and the developers hope to
bring in the bulldozers next year. But it will
take much more than the approval of one
big project to revive Greece’s economy. Mr
Mitsotakis must deal with twin legacies of
the crisis: paralysed banks and cripplingly
tight fiscal policy. He must also try to re-
form a bureaucracy that is more typical of a
developing country than of a member of a
huge and sophisticated currency bloc.Leaving Hades
Greece’s economy began expanding in
2016, after years of depression. But annual
gdp growth rates have been anaemic, at
1-2%. Unemployment is still 17%; the youth
rate, twice that. On the current trajectory,
the imfsays the economy will labour be-
low its potential until 2023. Nor is the cal-
culus of debt-sustainability likely to
change soon. Even as investment else-
where in southern Europe has recovered,
says Kathrin Muehlbronner of Moody’s, a
credit-rating agency, in Greece it has col-
lapsed. It is still 60% below its 2007 peak.
In Greece’s long agony during the euro-The Greek economy
To hell and back
ATHENS
Greece has been through a punishing decade. A new government aspires to get
the economy growing fast. Has it got the mettle?
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