Aug 12 (Reuters) – Wildfires and heatwaves ⁠pose ⁠a growing medium- and ⁠long-term fiscal risk for Greece and the wider region, a senior ​adviser to Prime Minister Kyriakos Mitsotakis said, as the government boosts investment to shore up ‌its tourism-dependent economy.

Michael Arghyrou, the ‌prime minister’s chief economic adviser, said Athens was pursuing investments in water and energy ⁠infrastructure in ⁠tourism hotspots while examining measures to improve insurance coverage against climate-related ​losses.

• “These events are becoming a more significant and, in many respects, more frequent and severe risk phenomenon,” Arghyrou told Reuters. “This is a medium, long-term fiscal risk, not just for Greece, ​but the whole of the Mediterranean area.”

• To address those risks, the government is ⁠pursuing ⁠an investment strategy aimed at ⁠strengthening water ​and energy infrastructure in tourism hotspots from Mykonos to Santorini, while also seeking to ​attract private capital, Arghyrou ⁠told Reuters.

• The strategy also targets Epirus, the North Aegean islands, Thessaloniki, Crete, Rhodes and the Peloponnese, where the release of Christopher Nolan’s film “The Odyssey” has fueled growing tourist interest.

• Hotter summers are extending the tourism season, drawing visitors from as early ⁠as April through October and November, a trend Arghyrou said was helping support ⁠tourism revenues.

• Arghyrou declined to say how much public funding would be allocated to the strategy, but said additional investment would be financed largely through higher tax revenues generated by a crackdown on Greece’s informal economy.

• Greece has no plans to issue catastrophe bonds, which provide funding after major disasters, though Arghyrou said the idea merited consideration.

• The government is exploring incentives to boost insurance coverage among households and businesses while encouraging insurers to offer ⁠affordable policies.

• Prime Minister Mitsotakis is expected to unveil tax incentives for businesses, workers and the self-employed next month ahead of a general election next year. Arghyrou said the measures would not come at the expense of fiscal ​discipline.

(Reporting by Johann M Cherian in Bengaluru, additional reporting by Renee ​Maltezou in Athens; Editing by Karin Strohecker)

Copyright 2026 Thomson Reuters.