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Greek Oil—Not from Olives

Light at the end of the tunnel can sometimes be blinding. As it records its first account surplus in recent history, Greece is seeing the light and is actively taking steps to allow for future economic growth. However, if not taken carefully, these steps can lead the country in the wrong direction.

In an effort to attract greater foreign investment, the Greek Energy Ministry is planning to open its country’s doors to permit the exploitation of oil and natural gas reserves beneath the Ionian and Aegean seas.  According to news reports, Greece claims its reserves contain US $600 billion in potential energy resources. If tapped, the reserves would make the country the top oil-producing nation in the Balkans.

Although Greece may be looking ahead into the future, perhaps it is not looking far enough. Traditionally, the Greek economy’s subsistence has hinged on the success of its tourism industry, which contributes around 15% to its GDP annually. This 15% depends largely on the ability of Greek businesses, namely hotels and resorts, to consistently provide visitors with a sparkling vacation atmosphere. Breathtaking views from rooms overlooking pristine beaches that lead into the crystal-clear water of the Mediterranean Sea are what satisfy tourists and make them return. If they slide their balcony doors open to the sight of giant gray refineries, and ominous-looking oilrigs in the near distance, the 15% we saw earlier vanishes.

According to Reuters, Greek Energy Minister, Yannis Maniatis, stated, “Today we have opened a new page for the Greek market.” His optimism is understandable; $600 billion can indeed, “open new pages,” even for the Greek economy. However, if the Greeks wish to keep their 15%, they need to be aware that tourism and drilling go together like olive oil and vinegar — they just don’t.

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