To grow out of its debt, Southern Europe must look beyond tourism and solve its demographic crisis

After collapsing due to travel restrictions to combat Covid-19, tourist numbers are now returning to pre-pandemic levels across Europe, with Mediterranean countries benefiting all the more.From a broken engine a decade ago, Southern Europe has become the workhorse of the post-pandemic European recovery. In 2021-23, Italy, Spain, Greece and Portugal have consistently accounted for between a fourth and half of EU GDP growth. In the future, climate change and inflation will make it hard for the tourism boom to last much longer. At the same time, tourism dependence leads to a less productive workforce. Facing a severe demographic crisis, this is a luxury that Italy cannot afford. Artificial intelligence and migration: all these levers will be needed to support growth and comply with the returning EU fiscal rules.

The EU recorded a record-breaking summer, with the number of nights spent in tourist accommodation reaching its highest level for a decade (1 198 million in H1 2023, i.e., +1,3% compared to H1 2019).