Alpha Bank CEO Vasilis Psaltis announced the bank’s strategic partnership with the Technical University of Crete to conduct an independent study on the island’s development trajectory through 2035 at the Economist Impact conference“Investing in Change: How Crete is Being Transformed"in Chania. "Crete has strong prospects, but the next phase of development will require more complex and targeted choices, based on data, strategy, and collaboration,"emphasized the CEO of Alpha Bank. The study will examine alternative development scenarios, the impact of major infrastructure projects, investment needs, and the resilience of the Cretan economy.
Study on the new development model
Mr. Psaltis noted that Crete is at a critical turning point and that making the right decisions requires a deep understanding of the data, not assumptions. “That is why we have supported an independent academic study that maps out the structure of the economy, the constraints and risks—including pressures on infrastructure and land use—as well as the investment pathways for the next decade,” he added.
As he explained, the study goes beyond a conventional economic assessment, as research teams will examine Crete’s trajectory under different development scenarios, assess its resilience to external shocks as well as its competitiveness compared to other leading Mediterranean tourist destinations, while analyzing the impact of major infrastructure projects such as the new airport in Kastelli and the BOAK, as well as the sectors with the strongest prospects through 2035.“The findings will be presented publicly in Crete and will be made available to the State, local government, institutional bodies, businesses, and the academic community,”emphasized Mr. Psaltis.
In response to a question from The Economist’s Countries Editor, Alasdair Ross, regarding the study’s academic independence, Mr. Psaltis noted that“we are not seeking predetermined conclusions; if the research reveals an overconcentration of investments, geographical pressures, or business models that are not sustainable in the long term, then these will be made public and taken into account in our own funding decisions.” He added:“If the risks are not identified in time, the local economy will bear them first, followed by the financial system; which is why we prefer to highlight them now, while there is still room for adjustment, because a bank that finances only what is safe is simply shirking its role.”
A substantive analysis of tourism data
Regarding the dynamics of tourism in Crete, Mr. Psaltis pointed out that“the real story of Crete is one of scale and speed, as tourism revenues reached approximately €4.3 billion in 2025, accounting for nearly 19% of the country’s total, with growth much stronger than initially estimated.”
At the same time, he acknowledged the pressures being felt, noting that the intensity of tourism is a given and that Crete ranks among the most "hotspots" regions in Europe; however, this situation should not be viewed as a simple, static phenomenon, but as the result of rapid growth, spatial concentration, and intense seasonality.
“The issue is not just how much tourism there is, but where and how it is distributed;incomplete or outdated spatial planning frameworks tend to concentrate activity in specific areas, intensifying local pressures, while at the same time, constraints on critical infrastructure, such as water supply networks, waste management, and the road network, can turn development into congestion. “Crete has strong prospects, but the next phase of development will require more complex and targeted choices, based on data, strategy, and collaboration,”Mr. Psaltis noted in this regard.
From Infrastructure to the Real Economy
In this context, the CEO of Alpha Bank noted that Crete is at the center of a very robust infrastructure upgrade program and that the challenge now lies in the ability of the economy and businesses to leverage these improvements. Crete already has a more diversified production base than is often estimated, with more than 120 non-tourism businesses with a turnover exceeding €10 million, operating in sectors such as manufacturing, agri-food, and industrial products, many of which are strongly export-oriented, he noted.
However, he pointed out that significant gaps remain in sectors such as logistics, supply chains, digital integration, and financing for smaller businesses, as well as in matters of human resources and employee housing, which are now critical constraints on growth.
He made special mention of the issue of seasonality, emphasizing that“although tourism in Crete remains heavily concentrated in the summer months, in recent years there has been a significant expansion beyond the traditional operating season.” As he noted, “the transition to a broader, nearly year-round model is feasible, but it requires enhancing the overall experience beyond sun and sea, with an emphasis on gastronomy, culture, and the unique identity of Crete, as well as appropriate connectivity”.
The data confirm this trend: October recorded a 10.5% increase in arrivals in 2025, while November saw an increase of nearly 40% year-over-year. The island’s peak season now extends from April to October and is expanding.
He also highlighted the role of major infrastructure projects, noting that“investments such as the BOAK, the new airport in Kastelli, and digital infrastructure create the conditions for the diversification and expansion of tourism, enabling the development of new forms of investment that are not limited to the peak season.”
Finally, Mr. Psaltis emphasized that the financial sector is in a position to strengthen strategic planning for regional development, underscoring the importance of evidence-based decision-making and institutional cooperation. As he noted, by combining banking experience with academic knowledge, a robust framework for understanding developments and preparing for the future is established, with the goal of making Crete more resilient, balanced, and competitive by 2035.