Greece's Strategic Debt Repayment and Economic Rebalancing

Greece's journey from the brink of financial collapse to a model of fiscal discipline and strategic reinvention is reshaping its economic narrative. Once synonymous with crisis, the country is now emerging as a compelling investment opportunity in Europe's high-growth, low-debt environment. By combining aggressive debt repayment, structural reforms, and targeted investments in key sectors, Greece is positioning itself as a resilient player in the post-pandemic global economy.

A Debt Reduction Success Story

Greece's public debt-to-GDP ratio, which peaked at over 180% during the height of the 2010s crisis, is projected to fall to 146.6% in 2025 and 140.6% in 2026, driven by strong nominal GDP growth and consistent budget surpluses. This trajectory is underpinned by a combination of fiscal discipline and strategic debt management. For instance, Athens has accelerated repayments on its 2010 Greek Loan Facility, committing to clear the remaining €31.6 billion by 2031-10 years ahead of schedule. Such actions have significantly reduced rollover risks and improved investor confidence.

Comparisons with other eurozone peers further highlight Greece's progress. While Italy's public debt is expected to remain above 137% of GDP through 2030, Greece's debt burden is projected to fall to around 125% by the same period according to Scope Ratings. This divergence reflects Greece's more aggressive fiscal reforms, including enhanced tax collection and anti-evasion measures, which have bolstered revenue streams and enabled primary surpluses to consistently exceed debt servicing costs.

Economic Rebalancing: From Defense to Green Energy

Greece's economic rebalancing extends beyond debt management. The country is strategically investing in sectors that align with both national security and long-term growth. A €28 billion military modernization plan through 2036, including the development of a multi-layer anti-aircraft system known as the "Achilles Shield," underscores its commitment to regional stability. This initiative, which involves partnerships with Israeli defense firms like Elbit and domestic Greek companies, not only enhances security but also stimulates industrial capacity and technological innovation.

Equally transformative is Greece's renewable energy sector. In 2023, renewable energy sources (RESs) accounted for 57% of the country's energy mix, with annual production reaching 21.35 TWh-more than double the 2014 level. This rapid transition has already exceeded targets set in Greece's National Energy and Climate Plan, enabling the country to set more ambitious 2030 goals. Wind and solar power are leading the charge, supported by EU-funded infrastructure projects and private-sector investments.

Tourism Recovery and Structural Reforms

Tourism, Greece's lifeblood, is rebounding with remarkable vigor. For the first nine months of 2025, hotel revenues rose 7.7% year-on-year, driven by extended seasons and premium pricing in resort areas. Thessaloniki, for example, saw a 6.7% increase in revenue per available room (RevPAR), while Athens and Santorini-despite seismic disruptions-maintained strong performance. Total tourism revenue reached €16.7 billion in the first eight months of 2025, a 12% increase from 2024.

Structural reforms are further solidifying this recovery. A new overnight stay tax and enhanced tax compliance measures in the tourism sector are boosting public revenues. Meanwhile, EU-funded investments in infrastructure and digital tools-such as AI-driven travel experiences-are enhancing competitiveness. These reforms, combined with Greece's natural and cultural assets, position the country as a top-tier Mediterranean destination.

The Investment Case

Greece's combination of low-debt dynamics and high-growth sectors creates a unique value proposition. Its concessional debt structure-73% held by official creditors like the ESM and EFSF-provides favorable interest rates and long maturities (average of 18.9 years) according to Scope Ratings. This stability allows Greece to channel resources into growth-oriented projects without compromising fiscal sustainability.

For investors, the risks are mitigated by Greece's improved credit profile. Scope Ratings anticipates a 23-percentage-point reduction in the debt-to-GDP ratio by the end of the decade according to Bloomberg, while the European Commission forecasts GDP growth of 2.3% in 2025 and 2.2% in 2026 according to Eurostat. These metrics, coupled with Greece's strategic location and EU membership, make it an attractive hub for diversification.

Conclusion

Greece's transformation from crisis to credibility is a testament to the power of strategic fiscal management and targeted investments. As it continues to reduce debt, modernize infrastructure, and harness renewable energy and tourism, the country is emerging as a beacon of resilience in Europe. For investors seeking exposure to a high-growth, low-debt environment, Greece offers a compelling blend of stability, innovation, and untapped potential.