Among the imbalances the European Commission has identified in the Greek economy is the overpricing of residential property.
The European Commission has included Greece in the seven member-states with economic imbalances, based on its “Alert Mechanism Report” released on Tuesday in the context of the European Semester. At the same time it gave its approval to the draft budget and issued a broadly positive assessment in the context of its post-program surveillance.
In Greece’s case the alarm bells ring on the following negative aspects: The trade deficit, the negative net investments, the high public debt as a GDP ratio, and the increase in property prices, which actually show signs of being overpriced.
Concerns on the trade deficit persist, the report argues, as it is above 2020 levels and those that economic data would justify. Last year it stood at 7.2% of GDP, and despite its projected easing this year it will remain high. Greece’s net investment position has improved but remains very negative, at -137.5% of GDP.
The state debt is high but is clearly receding. In 2024 it was at 154.2% of GDP, 29 percentage points below pre-Covid levels. However the Commission warns that the risks remain high in the medium term.
Household borrowing has been contained to 39% of GDP, but net savings stay negative (-2.5%). Nonperforming loans are decreasing at a slowing pace and continue to represent 7% of household borrowing.
The post-program surveillance report also highlights two more weak points of the Greek economy: the accumulation of state obligations that are not being serviced, and the slow rate of arrangement for the debts that servicers have accumulated. The stock of net overdue debts of the general government rose from 465 million euros in December 2024 to €626 million in July 2025.
The report further notes that “the creation of the National Central Procurement Authority for Health (EKAPY) has not yet brought the results anticipated.”
Brussels will prepare detailed reports for the seven countries with imbalances, noting the measures required.