Christina Georgaki of Georgaki & Partners
IMI Official Partner
Greek Prime Minister Kyriakos Mitsotakis has won a landslide victory with 40.6% of votes to extend his tenure for another four years. Mitsotakis’ party, New Democracy, also won a majority in Parliament, forming a single-party government.
Mitsotakis’ win comes as good news, especially for the Greek economy, as the Prime Minister has overseen a rapid economic recovery since he first took up the role in 2019 and is keen to continue the excellent work.
Talking to the public after the win, Mitsotakis reiterated his party’s commitment to elevating the Greek economy, and he was happy to share that he and his party “will put into practice in the second four-year term big changes and big reforms,” pointing out that they “have a strong mandate to implement these changes.”
Markets have rallied behind the news of Mitsotakis’ win, as another four years in charge will significantly benefit the Greek economy if history is an indicator. The Athens Stock Exchange General Index jumped on the news to its highest level in nearly a decade, up 36% from last year, significantly outperforming the European average, and a gauge of bank shares rose an impressive 16%.
According to the World Bank, during Mitsotakis’ first period in office, Greece’s GDP (in purchasing power terms) recovered to beyond 2010 levels, the year the country stopped being able to pay its debts and went into a downward economic spiral.
Mitsotakis steadied the ship, recovered quickly, and focused on the nation’s economy. He and his party helped revive the market, and the effects have been astronomical, as evidenced by unemployment being halved from the 28% peak it hit during the darkest times.
Mitsotakis’ continued tenure is good news for Greeks and foreign investors alike. Fitch Ratings and Standard & Poors now place Greece’s economy just one notch below investment, a testament to Mitsotakis’ efforts. From being considered Europe’s highest sovereign credit risk, the country is now on the verge of investment-grade ratings.
What this means for Golden Visa investors
The golden visa has enjoyed an excellent run under Mitsotakis’ administration. His first year in charge saw the highest number of approvals ever recorded, and application numbers quickly recovered after a pandemic-struck 2020.
2023 is set to see a record number of applications, the first third of the year alone recorded 60% of applications in 2022, which was a high-volume year itself, and we expect this year to shatter all previous records.
The magnitude of applications since the start of the year has been fueled by the government's decision to raise the minimum investment requirement for real estate in areas like Athens, Varo, Thessaloniki, Mykonos, and Santorini, as well as the subsequent decision to extend the grace period from the end of April to the 1st of July.
The price hike resulted in a massive number of applications, and Greece is now faced with a backlog of more than 5,000 investor applications and slightly over 8,000 of their dependents.
However, the Greek government's ability to handle significant application volume is well-known, and they should be able to cut down the backlog quickly.
But Mitsotakis' staying for another four years will surely add to the number of applications for the golden visa, especially among investors considering financial assets instead of real estate.
The property option will remain very desirable, especially considering the closure of that category under the Portuguese golden visa. Still, as the price hike is officially in effect, investors may also consider other options such as capital investment, bank deposits, and government bonds, all of which are in line for a boost under Mitsotakis.
Shortly after the initial election results were announced, all but three of the 60 stocks on the Athens index were up at the start of trading, Greek bank shares grew the most since late 2020, and lenders' bonds also rose.
Stamatios Draziotis, a Eurobank Equities strategist, expects "a sharp re-pricing of Greek assets in the coming weeks, as investors position for the compelling Greek thesis in the next few years," and that Eurobank Equities advocate for "a sharp re-pricing of Greek assets in the coming weeks, as investors position for the compelling Greek thesis in the next few years."
This is the optimal time for investing in government bonds as well, as the yield on Greek 10-year bonds fell five basis points to 3.55%, and the premium demanded by investors to hold Greek 10-year debt, as opposed to "ultra-safe" German bonds, reached its lowest point in over a year.
Risk is lower within the Greek economic environment, and the potential for higher profit margins is growing. The revitalization of the marketplace can only result in good things for golden visa investors, and the time to capitalize on it is now.
Under Mitsotakis' administration, the future looks bright, and so does the future of the golden visa. It is now on investors to act quickly to maximize their benefits.
Contact Georgaki & Partners today to learn more about your options for the Greek Golden Visa: