For decades, Greece’s economy was defined by inefficiency and tax evasion.

Even today, in neighborhood stores, many transactions are still carried out in cash.

But change is becoming visible on the streets, with plastic replacing paper money.

Shop owner Andreas Iosifidis says summer tourism brings more card use, even just for small amounts.

And many customers welcome the convenience of digital payments, as they no longer need to carry cash.

During the crisis years, international creditors imposed punishing austerity measures in exchange for three massive bailout packages.

Greece's population felt the pain deeply — wages were slashed, companies shut down and the economy bled jobs.

Sustained pressure from lenders forced successive governments to modernize one of Europe’s weakest tax systems.

Out went paper files and fax machines.

A decade ago, families flocked to a former shopping mall in an industrial area of Athens, with coin-operated rides for kids and an ice rink.

Today, the mall is gone, replaced by the headquarters of Greece’s Independent Authority for Public Revenue.

The white-slatted building houses a digital command center that symbolizes a national turnaround.

It is teeming with inspectors who chase down tax cheats.

They're assisted by drones, big data and live surveillance feeds from as far as Greece’s island ports and remote farming villages.

Analysts monitor millions of transactions in real time and order stings on businesses flagged by algorithms for a high potential of illegal activity.

The new technology has rewired Greece’s tax system — which was once a byword for inefficiency.

"We worked on it with dedication and persistence in order to change things,” says Independent Authority for Public Revenue governor Giorgos Pitsilis.

He adds that new digital tools, electronic invoicing and cash registers connected to Point Of Sales machines are helping combat tax evasion.

The digitally-enabled reforms have helped restore Greece’s bonds to investment grade.

And Greece — once considered Europe’s financial outcast — is now running budget surpluses.

The country was one of just six EU member states that recorded a budget surplus in 2024, after running deficits for decades.

Momentum carried into this year, with government revenues shooting past targets through August.

While critics argue that austerity-era tax hikes remain unfair, the government points to billions in new revenue funding tax cuts.

The revenue is a sorely needed boost for the government, which is facing public anger over a corruption scandal and the cost-of-living crisis.

Pitsilis says the reforms are a powerful argument that being tax responsible pays off.

Konstantinos Mallios runs a kiosk on the busy Syntagma Square in Athens.

He accepts cards even for small amounts and says that at the moment, tourists prefer cards to Greeks.

By November, all businesses will be required to accept IRIS, a Greek instant payment system similar to Venmo in the United States.

It will eliminate bank and payment provider fees currently incurred by vendors.

Greece’s progress is an example how a crisis can accelerate reforms, observers say.

And further integration of artificial intelligence into the tax authority's systems through 2026 is expected to accelerate this process.

AP Video by Srdjan Nedeljkovic and Lefteris Pitarakis

Production by Derek Gatopoulos and Theodora Tongas