Podcast Summary

Episode Overview

Podcast: LSE: Public Lectures and Events
Episode: Greece’s Economic and Digital Transformation: In Conversation with Kyriakos Pierrakakis
Date: November 14, 2025
Guest: Kyriakos Pierrakakis (Minister of Finance, Greece)
Host: Vassilis Monastiriotis (Director, LSE Hellenic Observatory)
Event Partners: LSE Hellenic Observatory, Hellenic Bankers Association

In this episode, the LSE welcomes Greece's Finance Minister Kyriakos Pierrakakis, celebrated for leading transformative reforms in both digital governance and economic policy. The discussion explores Greece’s remarkable fiscal comeback, the challenges of fostering productivity, the nuances of European integration, and the lessons of crisis-driven reform. Pierrakakis shares candid insights from his leadership roles, identifies priorities for the future, and responds to audience questions on topics ranging from capital markets to the digital state.

Key Discussion Points and Insights

1. The Turning Point in Greece’s Recovery

• Fiscal Discipline through Hard Lessons

  • Greece’s success is attributed to the “accumulated experience” and “collective trauma” of the debt crisis, which led to a societal and political “mentality shift.”
  • “Getting our fiscal house in order is a function of accumulated experience, it's a function also of collective trauma, because that was the Greek crisis for us.” (D; 06:36)
  • Greece’s consistent primary surpluses and declining unemployment underscore the turnaround—now being studied by other EU countries.

• Avoiding Past Mistakes

  • New generations, regardless of party, agree on avoiding “passing the bill to the next one”—fiscal prudence has become a regime, not a policy preference.
  • Growth must “reach every household”, and structural challenges, like productivity, remain.

2. Growth, Direction, and Productivity

• Growth’s Rate and Direction

  • Growth should not only be rapid, but targeted toward environmental and social sustainability.
  • Pierrakakis stresses the need for overcoming Greece’s “productivity challenge”—despite advances, the country must close the gap with EU averages.

• The Role of Tourism and Structural Reform

  • Tourism, while criticized for crowding out productivity, was a “lifeline” during crisis years.
  • “If you see how the tourism industry...has innovated in the last years, the way it has become more sophisticated, I think it's self evident to every visitor of Athens. So I wouldn't necessarily underline it as a problem.” (D; 13:53)
  • Industrial and sectoral policies—especially at the European level—are needed to push sectors toward the technological frontier.

3. Industrial Policy and European Integration

• Limits and Leverage of National Policy

  • Structural realities of the EU single market mean that strategic sectors (like telecoms) require pan-European, not strictly national, intervention.
  • Pierrakakis champions the “Savings and Investment Union” (SIU) as essential for Europe-wide growth and innovation:
    “We do not need 27 efficient markets, we need 1, 1 single efficient market in Europe.” (D; 13:53)

• Championing European Champions

  • Instead of replicating US or Chinese models, Europe should “capacity build your champions” and set institutional reforms to unlock cross-border mergers and acquisition.

4. Navigating Divergent European Preferences

• Balancing Ambition with National Specificity
  • While Greece is ambitious in energy transition (e.g., wind/solar), certain policy stances (shipping, tobacco, renewable energy) reflect Greek national interest.
  • “We abstained, we didn't veto... given the structure, the size and the interests of the Greek fleet and our interest as an economy.” (D; 25:56)
  • Uniform policies across EU can fail; Europe must account for heterogeneity of preferences among member states.

5. Debt Repayment, Fiscal Space, and Social Equity

• Repaying Crisis-Era Loans: Not Austerity, but Prudence

  • Greece’s early repayment of bailout loans is a signal to markets and future generations, not “continued austerity.”
  • Pierrakakis emphasizes direct tax cuts targeted at households, rather than VAT reductions that are less effective: “Only two out of ten euros effectively reach the household when you get the VAT tax... So for us, it was never a dilemma.” (D; 29:42)

• Positive Feedback Loop

  • Healthy fiscal balances and growth reinforce each other; despite improved macro numbers, challenges—especially in alleviating poverty and supporting vulnerable groups—persist.

6. The Digital Transformation of the Greek State

• Digital as a Management and Design Challenge

  • Reforms under Pierrakakis were less about technology and more about rethinking service design: “Digital is not about digital, it's about management, it's about a mindset shift... It shouldn't be called the digital ministry, it should be called the service design ministry.” (D; 35:16)
  • Preparation, team building, and strategic alignment were key.

• Overcoming Bureaucratic and Political Resistance

  • COVID-19 accelerated digitalization by making previously “nice-to-have” reforms a necessity.
  • The development of gov.gr (digital services portal), recognized as Greece’s most popular reform since the NHS, mapped thousands of services to enable radical simplification: “What you can't measure, you can't reform. So we measured ourselves.” (D; 39:12)

7. Q&A: Connecting Policy to People

Selected Audience and Online Questions:

• On Financial Literacy and Capital Markets

  • Despite surging stock prices, Greek participation in equities is low (10% vs. 60% in the US). Pierrakakis highlights new legislation, Euronext’s acquisition, and financial literacy initiatives. “We introduced extra classes in financial literacy when I was there because we fully understand that this is also an area of policy that we need to fully focus on.” (D; 48:09)

• On Productivity and Domestic Reform Priorities

  • Priority areas include demographics (with targeted tax relief), continued education reform, cadastral completion, and building on strong fiscal/banking reform triangle.

• On European Tech Dependence

  • Europe struggles to diffuse technology developed domestically. The solution: foster cross-border M&A, support “European champions,” and fully realize the SIU.

• On Institutional Quality and Subjective Poverty in Greece

  • Pierrakakis acknowledges persistent institutional gaps but emphasizes a new culture: “Successes evaporate, mistakes accumulate” (Tetris analogy; D; 55:34). On poverty, macro improvements are evident, but energy, food, and housing costs still demand targeted relief.

• On Early Loan Repayment

  • Early repayment is a signaling mechanism for credibility, not a substitute for spending on citizens—it does not diminish available fiscal space.

• On Offering Advice to Other Countries

  • “The word hubris is Greek. I don't plan to fall on that trap.” (D; 62:02)

Notable Quotes & Memorable Moments

On the importance of system-wide reform and culture change:

“The policy lesson is that my generation in politics... regardless of party, we shouldn't repeat the core mistake of the previous generations. We shouldn't pass the bill to the next one.”
(D; 06:36)

On resiliency and optimism:

“Greece managed to withstand this crisis exactly because it had a series of hidden strengths in the families, in the businesses, throughout the economy, not necessarily depicted by a mathematical model...”
(D; 13:53)

On digital transformation:

“Digital is not about digital, it's about management, it's about a mindset shift, it's about changing the way you offer services to citizens.”
(D; 35:16)

On public sector reform analogies:

“If you remove the wrong brick, the edifice collapses. What you need to do is to build on top of the edifice... Let's agree upon them and start building on productivity...”
(D; 13:53, Jenga analogy)

On reform delivery:

“Strategy is delivery. It's not about strategic vocabulary... People are bored of grand political narratives which are not founded upon solid delivery of policy change. People want to see the delivery. They want to see prose rather than poetry.”
(D; 35:16)

On Tetris and Political Success:

“Successes evaporate, mistakes accumulate.”
(D; 55:34)

Key Timestamps

• Turning point & mentality shift – 06:36–09:45
• Growth’s direction, productivity & sectoral policy – 12:03–19:54
• European integration and the need for a single market – 19:54–24:29
• National exceptions & climate policy – 24:29–28:30
• Loan repayment, fiscal priorities – 28:30–33:49
• Digital reform lessons & bureaucratic challenges – 35:11–44:06
• Q&A on finance, productivity, European tech, and institutions – 46:04–62:02

Conclusion

This episode offers a candid, sophisticated account of Greece’s transformation from the perspective of a key architect of reform. Kyriakos Pierrakakis’s emphasis on learning from crisis, fostering a culture of delivery, and pushing for ambitious European integration resonates as both a case study and a manifesto for modern governance. Despite remarkable progress, he recognizes the persistent need to balance fiscal prudence, social equity, and innovation—always wary of overpromising, and ever focused on credible, pragmatic change.