Eurogroup Chief Says Greece Can Withstand Middle East Crisis

Kyriakos Pierrakakis, Greece’s Minister of National Economy and Finance and President of the Eurogroup, stated that Greece remains on a growth trajectory and can absorb the economic shock caused by the crisis in the Middle East, highlighting the country’s improved resilience in an interview with Le Point journalist Philippine Robert.

Pierrakakis emphasised that Greece’s economy has strengthened significantly in recent years due to sustainable growth, improved public finances and continued structural reforms.

Le Point noted that Greece, once considered the “sick patient” of Europe during the financial crisis, now demonstrates strong fiscal discipline, robust growth, declining unemployment and a rapidly decreasing public debt ratio. However, the publication highlighted ongoing challenges, including inflation pressures on households and the potential impact of a new energy crisis linked to developments in the Middle East.

Responding to questions about the potential effects of rising energy prices, Pierrakakis said Greece remains well positioned to absorb external shocks. He cited the latest Article IV report by the International Monetary Fund, which emphasised strengthened fiscal stability and a more resilient financial sector capable of withstanding volatility in energy markets.

Since April 2026, Greece has implemented a €300 million support plan to address rising energy costs. Key measures include a subsidy of €0.16 per litre on diesel fuel, resulting in a total reduction of €0.20 per litre including VAT, a digital fuel card for consumers and a 15% subsidy on fertiliser costs for farmers. The government indicated that additional targeted measures may be introduced if required to protect vulnerable households and ensure market stability.

Pierrakakis highlighted the country’s improved economic performance, noting that Greece now records a primary surplus and one of the fastest declining debt-to-GDP ratios in Europe. Economic growth is projected to reach 2.4% in 2026, among the highest rates in the European Union, while public debt is expected to fall below 120% of GDP by the end of the decade.

He attributed this progress to structural reforms, political stability, European support and policy continuity under the government of Kyriakos Mitsotakis since 2019. Unemployment has reached its lowest level since 2008, reflecting the country’s recovery from a crisis that resulted in significant GDP losses and large-scale emigration.

Addressing concerns about living costs, Pierrakakis acknowledged that inflation continues to place pressure on households and that housing affordability remains a challenge across Europe. He stressed that ongoing reforms aim to strengthen growth while providing targeted support to citizens through tax measures designed to increase disposable income.

Discussing lessons learned from the sovereign debt crisis, Pierrakakis emphasised the importance of maintaining sustainable public finances and avoiding policy mistakes that could burden future generations. He noted that strengthening competitiveness, productivity and digital transformation remains a priority, particularly in light of demographic challenges.

He highlighted progress in digital reforms, with more than 2,000 public services now digitised, improving efficiency and transparency. Future priorities include further digitalisation of the justice system, healthcare and education, as well as attracting international students to Greek universities.

Regarding his recent European role, Pierrakakis stated that Greece’s objective is not “revenge” for the past crisis but responsibility to deliver results. He stressed the importance of translating European strategies, including proposals outlined in the Draghi report, into tangible outcomes that strengthen competitiveness.

Pierrakakis concluded that although risks remain, Greece is moving in the right direction and there are strong reasons for cautious optimism about the country’s economic future.