The Economic Disparity between Urban Centers and Peripheral Regions in Greece

In Greece, there are two distinct realms: one comprises the major urban centers, such as greater Athens area and Thessaloniki, where half of the country’s population resides and the bulk of its GDP is produced, while the other encompasses the entirety of the nation’s regions. The disparity between these two worlds is substantial.

According to the latest data from ELSTAT, in 2021 the broader region of Athens accounted for 47.9% of the domestic Gross Value Added, with Central Macedonia following at 13.7%. The Ionian Islands accounted for 1.6%, and the islands of the Northern Aegean for 1.3%. Regarding GDP per capita, the capital is again at the top with 23,335 euros, with the North Aegean being at the bottom position with 10,658 euros.

Stelios Gialis, Associate Professor of Economic and Labor Geography at the University of the Aegean, explains that in Greece, the economy’s free market nature exacerbates the gap between the central areas and the periphery. This disparity is amplified due to the lack of robust regional development initiatives. Consequently, agricultural and informal sector activities, prevalent in rural areas, yield lower incomes compared to the urban centers where large wage labor markets and self-employed professionals are concentrated.

This observation is confirmed by Athanasios Malliaras, president of the Chamber of Commerce of Serres, who emphasizes the challenges faced by the prefecture, consistently ranking low in GDP per capita. He notes the decline of the primary sector as a significant issue and highlights the impact of cross-border smuggling due to the proximity to Bulgaria. Additionally, he mentions the allure of favorable taxation in the neighboring country, prompting business migration, especially during the economic crisis. Malliaras calls for the establishment of a Special Economic Zone in Serres to address these issues.

On the contrary, the picture emerging from the region of the South Aegean, is encouraging. According to professor Stelios Gialis, the dynamism of this region is attributed to its tourism sector, which did not suffer the same blow as other industries during the period of the great recession. Tourism supported construction and employment, despite the fact that “many of the jobs it provides are not well paid.”