Above: photo by Dimitris Papamitsos/ Greek Prime Minister’s Office

Nearly all of the low-slung café tables in the Hotel Grande Bretagne’s lounge are already occupied by late in the afternoon on an average Thursday. This is the domain of the suit-and-tie crowd; tourists opt for the rooftop bar, eight floors up, both for the Acropolis views and for a less buttoned-up vibe. As the November afternoon wears on and daylight fades, the buzz in the lounge heats up. Tea service yields to bar service, and patrons jockey to be heard above the piano. The rising roar—of deals closing, orders taken and filled, even the blare of rush-hour traffic clogging the central square of Athens out front—is the sound of Greece’s GDP on the move. It’s the ring of an economy finally looking up.

“This place would have been empty in 2015,” says Dimos Arhodidis (PhDBE 1998), looking out at the crowd from over a glass of fresh orange juice. For the last 18 years, Arhodidis worked for Eurobank, one of the country’s four systemic banks. When he left last July, he was a member of the executive board and a general manager in charge of global markets, private banking, asset management, and repossessed real estate assets—which Greece has had a wealth of in recent years.

Photo by Louisa Gouliamaki/Getty Images

Indeed the last decade has been rough on the country, to vastly understate the impact of a sovereign debt crisis that nearly kneecapped the entire eurozone. A succession of three bailouts worth $360 billion between 2010 and 2015 kept the country afloat, but just barely. The banks were recapitalized three times, and Greece lost a full quarter of its GDP, which—like the brain drain of about 420,000 Greeks who left the country to seek employment elsewhere—has yet to come back. Those who stayed suffered through tax hikes, a pension freeze, and unemployment that peaked at 28 percent, while more than 44 percent of the population slipped below the poverty line. And violent protests.So many years of protest, much of it fueled by anti-austerity anger and the inherent tensions from years of political instability.

The Grande Bretagne, which presides over the epicenter of Athens—looking out over Hellenic Parliament on one corner and Syntagma Square on the other—has been witnessing the capital’s highs and lows since 1842. Protesters took hammers to the hotel’s white marble steps in 2015 and hurled hunks of it at the police. The economic trauma edged in too: The King George Hotel, just next door, sold for a song in 2017, when Eurobank was unloading foreclosed properties to bring down the balance of its nonperforming loans. “Forty-three million euros, it was the best offer we got,” says Arhodidis. Foreign investors steered clear. The property might fetch 20 percent more now, he adds.

Like many other sectors in Greece, commercial real estate is on the rebound. It’s a direct response to the July 2019 national election in which Kyriakos Mitsotakis (MBA 1995) of the center-right New Democracy party won a landslide victory over the ruling radical left-wing SYRIZA party. During the campaign, Mitsotakis pledged to bulldoze the barriers that have long made Greece a difficult place to do business and set spinning a virtuous cycle of foreign and domestic investment, job creation, and growth of a scale sufficient to finally propel the country back to prosperity. Within his first 100 days, Mitsotakis announced to investors the world over that Greece is open for business.

And it’s happening, both in the buzz at the Grande Bretagne and on the world stage. Arhodidis, for one, has a new job. The London-based investment manager Chenavari decided within days of the election to acquire Aegean Baltic Bank and expand its footprint in Greece. Arhodidis is overseeing the transition through the regulatory approvals, and then will become the bank’s CEO. “It’s one of the first examples of foreign investors moving quickly in response to Mitsotakis coming to power,” Arhodidis says. Meanwhile, one of his former Greek private-banking clients at Eurobank swings by the table with a greeting. The real estate developer has worked primarily in London for the last half-dozen years but is back to give his home country another look, Arhodidis says. “It’s a positive sign for foreign investors who want to see Greeks investing in Greece first.”

China isn’t waiting. When President Xi Jinping visited Athens in November, the two leaders announced 16 different agreements, including a €600 million investment by China’s state-owned shipping giant COSCO in the Port of Piraeus. The port, which sits on the sapphire waters of the Saronic Gulf, has been a strategic asset since the 5th century BC. The investment will transform it into the biggest port in Europe and create critically needed jobs.

Many Greeks, particularly those in the business community, see this new government as the now-or-never chance to finally set the country on solid footing. But Mitsotakis is clear that his goal is not growth at any cost, and it’s not just about business interests: To truly transform Greece into a success story of the eurozone, the spoils of economic expansion have to reach everyone, from the dock to the boardroom.

In November, Chinese President Xi Jinping and Mitsotakis announced an investment by China’s state-owned shipping giant COSCO in the Port of Piraeus terminal in Athens. (Bloomberg/Getty Images)

On the first Friday of November, four months after assuming office, Mitsotakis is taking meetings at Maximos Mansion, the official seat of the prime minister, in central Athens. He and his wife, Mareva Grabowski Mitsotakis (MBA 1996), are fresh off a series of state visits and looking forward to a rare weekend at home. Mareva emerges from a reception room, and a fountain of Bubble Wrap trails behind her. She’s working with the National Gallery to introduce more modernity to the office aesthetic, selecting a few contemporary paintings for the walls of Maximos Mansion. The prime minister, meanwhile, is running a bit behind schedule.

In the space before he arrives, Mareva sits down to reminisce about HBS. She came to appreciate it all anew in 2011 when, after a dozen years in investment banking at Deutsche Bank and running her own asset management firm, she became an entrepreneur. The idea behind Zeus+Dione, a modern collection of clothing and accessories inspired by Hellenic heritage, was to source silks and embroidery from traditional craftswomen throughout the region, whose skills were no longer finding demand, and sell the products internationally. It was a brilliant idea at the worst of times.

“It was challenging to persuade people, when the country was falling apart, that you see an incredible opportunity to move ahead,” she says. But all of those cases from second-year Entrepreneurial Finance proved invaluable in helping her grow the business in spite of a fractured economy. Today the brand has a flagship store in Athens and is featured in boutiques across Europe, Asia, the Middle East, Latin America, and the United States.

More importantly, Mareva says, HBS is where she and Kyriakos met in 1994, at a reception for Greek students at the now-bygone Pizzeria Uno in Harvard Square.

“Everything else is irrelevant,” the prime minister says, simultaneously making an entrance and scoring major marital points.

Mareva Grabowski Mitsotakis (left) spent a dozen years in investment banking before launching Zeus+Dione, a line of clothing and accessories that showcase Greece’s cultural heritage and craftsmanship. (photo by Jon Enoch)

In truth, his business background is central to his work as head of state. Before coming to politics in 2003, Mitsotakis worked in finance at Chase and McKinsey in London. When the couple returned to Greece, where they would raise their three children, he founded NBG Venture Capital, a subsidiary of the National Bank of Greece, and served as its CEO.

“I’m occasionally accused of running the country like a corporation,” he says of his leadership style, which was immediately on view: Elected on a Sunday, sworn in on Monday, by midweek Mitsotakis had convened a cabinet with more technocrats than the country had ever seen and handed them their goals and benchmarks. When property-tax bills landed in mailboxes several weeks later, they reflected across-the-board cuts. The deepest, 30 percent, went to households with lower incomes. It set the tone and pace for things to come: Mitsotakis is wasting no time, moving away from a reliance on taxes and austerity measures, and making sure benefits are shared fairly.

To get there, he is drawing on principles of management and leadership that he says transcend business and politics. “We have teams. We have to focus on deliverables. We have to inspire. We have to be humble. We have to be able to measure outcomes,” he says. Governing a country is also an exercise in managing multiple stakeholders and, at the grandest possible scale, change management—a course he took with then-professor Nitin Nohria. “We have to come up with the best possible solution to complicated public policy problems,” he says, weighing all the evidence against a gut feeling.

Beyond his business acumen, it’s also possible that Mitsotakis inherited a bit of political instinct. The prime minister comes from one of the country’s most powerful political dynasties, stretching into the uppermost boughs of his family tree. His father, Constantine Mitsotakis, held a number of government roles before serving as prime minister from 1990 to 1993. (Kyriakos spent those years earning a master’s in international relations from Stanford.) His sister, Dora Bakoyannis, serves in parliament and was mayor of Athens during the 2004 Summer Olympics—a position now held by her son, Kostas. Dora’s first husband, the politician Pavlos Bakoyannis, was assassinated in 1989 by members of the militant 17 November Group.

A year later, as a Harvard undergrad, Mitsotakis wrote his senior thesis about Greek foreign policy and dedicated the analysis to his late brother-in-law. Mitsotakis was awarded the prestigious Alexis de Tocqueville and Hoopes Prizes for the analysis, which opens with a Tocqueville quote and includes a chapter about populism, both of which ring with relevance to this day.

After grappling with questions about the country’s governance for most of his adult life, Mitsotakis entered politics in 2003 and was elected the following year as a New Democracy candidate in parliament, where he served on a host of committees. In 2013, then–prime minister Antonis Samaras (MBA 1976) appointed him minister for administrative reform and e-governance.

Samaras would serve for three years, from 2012 to early 2015, leading the country through some of the worst years of the crisis. His government was tasked with implementing the austerity measures demanded by its international creditors, the so-called troika. With a population fatigued by the fiscal straightjacket, even basic initiatives struggled to get traction. In an effort to boost tourism—a major contributor to the country’s economy—Samaras introduced a law that would allow hotels to shuttle passengers to and from the airport, for example. “Basic supply-and-demand stuff,” Samaras says. The proposed law faced such bitter dissent from taxi drivers that Samaras thought it might never get off the ground. “Structural changes were very difficult because people had gotten used to playing with the old cards. Nothing was changing,” he says.

Against those odds, the economy seemed to be picking up in 2014, with boosts in tourism and investment, and a general sense that life under the Attic sky might be getting back to normal. Then the intricacies of Greek parliamentary procedure triggered snap elections, the Samaras government fell, and Alexis Tsipras of the SYRIZA party (an acronym meaning “coalition of the radical left”) rode a populist wave of dissent to victory in January 2015, campaigning to end the “national humiliation” of taking orders from Greece’s foreign creditors.

Six months later, Greece was in free fall. Many of its citizens assumed the country would be booted from the European Union and started pulling billions of euros out of the banks. To prevent total collapse, the government closed the banks for three weeks and limited withdrawals to €60 a day. The capital controls hit the population hard; for many employers, it was a knockout. From 2008 to 2015, 244,712 businesses went bankrupt, according to the European Commission, taking with them 842,670 jobs in a country of only 10.6 million people.

It was against that backdrop that Mitsotakis ran for president of the New Democracy party in 2015 as a pro-market liberal reformer, which made him a bit of an outlier in the more conservative and nationalist party. But he had a few things going for him, explains Harvard’s Nicolas Prevelakis: “He was very prepared, he brought a data-driven approach and a very clear message of technocratic governance and seriousness.” He also asked voters to judge him by his CV, and campaigned on his first name to outrun the notion that he is the scion of a political dynasty. “To the surprise of many, he won,” Prevelakis says.

Once snap elections were called in 2019 and New Democracy won in a landslide, Mitsotakis came to power as a relative outsider, free of the usual debts to the party machine. That gave him the freedom to pick and choose his cabinet from the private sector and other political parties and tune its focus to performance, instead of political ideology.

The public sector is already running more like the private sector, says Vassilis Antoniades (MBA 1999), managing director and senior partner in the Athens office of BCG. In 2018 the consultancy published a report highlighting the role that a startup ecosystem could play in boosting the economy. Now when Antoniades confers with ministers, he’s met with PowerPoint presentations and SWOT teams that take on task forces, he says. “The government feels like a well-run organization, and that’s new for this country.”

Changing the private sector will take longer. A whole host of structural impediments predated the populist government by several decades, says Titan Cement CEO Dimitri Papalexopoulos (MBA 1987), who leads the Athens-based multinational producer of cement and other building materials. He ticks through a long list of issues that have made Greece unfriendly to business, from thickets of overregulation and archaic labor laws to the lack of a national land registry—a permitting process that can take years—and an ineffective tax system that targets too narrow of a slice of the population at rates that are too high.

“There are many interesting things in our past that are relevant for today’s discussion about which direction we want to take the country.”

(Photo by ullstein bild Dtl./Getty Images)

“There are many interesting things in our past that are relevant for today’s discussion about which direction we want to take the country.”

(Photo by ullstein bild Dtl./Getty Images)

Titan operated only in Greece for its first 90 years, says Papalexopoulos. Both his grandfather and his great-grandfather, who founded the company in 1902, peer out over the conference table from their portraits on the wall—one over the CEO’s left shoulder, the other over his right. Titan began expanding internationally in the 1990s and now runs operations on four continents. Today Greek business represents just 15 percent of company assets and 6 percent of operating profitability.

“That is a reflection of our international growth, but it’s also a reflection of how badly the Greek market has done over the last few years,” says Papalexopoulos, noting that demand for Titan’s products in Greece has fallen 82 percent since 2007 and stayed at that level. People still have to eat and dress during a crisis, but they don’t build homes, and a bankrupt government doesn’t build new infrastructure, he says.

The outlook changed dramatically with the July elections. By speaking the language of business, showing up on day one with a plan, and demonstrating a willingness to take on structural reforms—beyond those imposed by the international lenders—the prime minister is bolstering trust and confidence, Papalexopoulos says.

It’s a sentiment shared by Alexander Macridis (MBA 1991), president and CEO of the plumbing and industrial supplier Chryssafidis S.A., founded in 1882 by his great-grandfather. Macridis sat in on meetings with the SYRIZA government early in 2015 and saw the writing on the wall. “I found them unrealistic and hostile to what for-profit institutions need,” he says.

Chryssafidis, one of the 10 oldest companies in the country, survived the crisis due in part to its emphasis on exports and some pre-crisis advice from Professor Dante Roscini, who held senior positions in leading US investment banks before coming to HBS. “He told me that he was surprised by how many companies borrow when they need it and not when they can,” recalls Macridis. So when Bear Stearns fell in 2008, Macridis wondered if it wasn’t a sign of things to come and decided to borrow money that he didn’t need. Later, when sales dropped 40 percent and capital controls gridlocked the banks, the company was able to continue to fund inventory, service their clients, even prepay employees and suppliers.

Macridis is hiring again. It’s still early days, but given the brain drain of the last decade, he doesn’t want to wait. “We think when the whole thing picks up it will be harder to find the true stars,” he says. He is also investing in IT infrastructure, training, and even cautiously raising wages. Misery isn’t good for business, he says. “It doesn’t get the best performance from people. We want to create a sense of higher optimism.”

Like Papalexopoulos—and every other HBS alum interviewed in Greece for this story—Macridis knows Mitsotakis either personally or professionally. (That’s what you get in a small country with a robust alumni club.) But Macridis says his optimism is rooted in the rational: “Kyriakos understands what makes the economy tick and what investors need. He has introduced a new political style that is more inclusive, less adversarial, and more focused on getting things done. I also think he realizes that unless the country really changes quickly, his own political future won’t be very bright.”

One sign of change was the prime minister’s nomination of Katerina Sakellaropoulou, a high court judge with a progressive environmental record and no known political affiliation, as the country’s first female president. In the context of Greece’s traditional society, the choice was loaded with symbolism and political savvy, BCG’s Antoniades says. The January vote passed with a supermajority of 261 out of 300 deputies, a rare moment of unity for a parliament more accustomed to partisan division. Mitsotakis called the result “a window to the future.”

In his acceptance speech in July 2019, Mitsotakis called upon the hundreds of thousands of Greeks who left the country during the chaos of the crisis to consider coming back home. (photo by Milos Bicanski/Getty Images)

Back in Maximos Mansion, now due for his next meeting, Mitsotakis is sober about the challenges in the four years ahead, particularly in a shifting geopolitical context. The refugee crisis is far too great for Greece to face on its own. Germany, the biggest economy in the eurozone, is showing signs of weakness. The US-China trade war, Brexit, and Turkey continue to ramp up uncertainty.

The new government’s greatest threats might be both the height at which expectations are soaring in the business community and the depth of skepticism at the other end of the spectrum. Ask the average taxi driver how they feel about the new government, and you’re likely to hear a very different perspective. An October 2019 poll by the Pew Research Center found that two-thirds of the population are frustrated with the way democracy is working. But those attitudes aren’t new: Four centuries of Ottoman rule undermined the country’s trust in public institutions.

As a reminder, an oil painting hangs at the focal point of the prime minister’s offices. It depicts the game-changing Battle of Navarino in 1827, when Greece and its allies sank the Ottoman fleet in the Ionian Sea, setting the stage for Greek independence.

“There are many interesting things in our past that are relevant for today’s discussion about which direction we want to take the country,” Mitsotakis says. Greece used to be a country that knew how to leverage its natural competitive advantages. It was a country of wealth and fairness and a place that valued the environment, he says. “And frankly, it used to be the best place in the world to live or work or retire or come for holidays. So I set my ambitions very high.”

Mitsotakis is confident that capital won’t be the constraint to growth. Human capital might be, though. “We have 420,000 well-trained Greeks abroad,” he says. To lure them back, people will need to see that they could come back to reduced taxes and available jobs. But most importantly, Greeks need to see that the country is truly on an upward trajectory, that this isn’t a blip. Like the rest of Europe, they’re watching to see what comes up from the post-populist ashes.

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