Greece by ashrafp


									                                                                                  The Eurasia Center
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                                                                             Washington, DC 20009

                             Greece: Economic Overview
Path to EU Accession:
After World War II, Greece joined NATO in 1952 but was ruled by a military
dictatorship until 1974 when democratic elections a referendum to abolish
the monarchy and create a parliamentary republic were held. In 1981,
Greece joined the European Community and is now a full member of the
European Union.1

Economic Indicators:
   Greece has aligned its economic policies to conform to European Union
    standards. The euro has been in use since January 2002, a change which
    enabled Greeks to borrow at lower rates and thus boosted consumer
    spending significantly.2
   Greece is a major recipient of European Union aid, which accounted for
    roughly 3.2 percent of GDP in 2005. From 1994 until 2006, roughly $44
    billion in EU structural funds have been transferred to Greece. Another
    $24 billion has been allocated for the period of 2007-2013. These funds
    are vital in reducing Greece’s budget deficit and support major
    infrastructure projects.3
   The US trade surplus to Greece totaled $1.5 billion, while US imports
    constituted roughly 4% of all imports in Greece. US exporters to Greece
    face no major non-tariff barriers to trade.4
   Romania, along with Bulgaria, is scheduled to enter the European Union
    in January 2007. This has been the primary reason for much of the
    changes being made in Romania and will also result in many more
    positive economic changes and growth after accession. In June 2006, EU
    enlargement commissioner Ollie Rehn said that Romania must strengthen
    anti-corruption and anti-organized crime efforts in order to create the
    business environment necessary for accession to the EU.5

Economic Structure:
 Greece’s economy is primarily service-based. Tourism, in particular,
    provides about 15% of the GDP.6 Roughly 14 million tourists visited
    Greece in 2005, spending roughly 10 billions euros in that year.7

  CIA World Factbook, “Greece” (
  Greece, State Department Background Notes (
  CIA World Factbook, Greece (
  Greece, State Department Background Notes (
   Transport also plays a major role in Greece, particularly maritime
    shipping. Receipts from shipping exceeded those of tourism in 2004 and
    2005. As of March 2005, the Greek merchant fleet contains 3,338 ships,
    which is roughly 8.7% of the world merchant fleet.8
   The government has focused major efforts on reducing the fiscal deficit to
    3% of the GDP by the end of 2006, 2.3% of GDP by the end of 2007, and
    1.7% of GDP by the end of 2008.9
   2005 was a major year for the Greek economy. After the 2004 Olympic
    Games, Greece maintained a growth rate of 3.7% and lowered
    unemployment, through a series of economic reforms it touted as vital to
    avoiding a post-Olympic recession.

Political Considerations:
   Greece has a unilateral legislature, called the Vouli. It has 300 members.
    Elections in March 2004 gave the New Democracy Party 165 seats and
    the Panhellenic Socialist Movement 117.10
   Major political issues include relations with the Former Yugoslav Republic
    of Macedonia, relations with Cyrus (and Turkey), and relations with


   Market Size: Roughly 35 million people live within a 500 kilometer
    radius of Greece, in Albania, Bulgaria, the former republics of Yugoslavia,
    and Greece.
  Department of State Background Note, Greece (
  “Gov't focused on fiscal, structural reforms, FinMin says” Athens News Agency
   Greece, State Department Background Notes (
   Eurostat, Hellenic Ministry of Economy and Finance -Update of the Hellenic Stability and Growth Programme
Troubled Spots:
    Budget Deficit: Greece hit a budget deficit high of 6.6% of GDP in 2004
     as a result of extensive spending related to the 2004 Olympic Games held
     in Athens. The deficit has since fallen to roughly 4.3%.13
    Absortion of EU Funds: Greek officials have recently been meeting
     with the EU Commissioner for Regional Policy, Danuta Hubner, to discuss
     ways to discuss the low absorption rate of EU transfer payments through
     the Third Community Support Framework Programme. Greece has
     doubled the absorption rate of those funds over the past years and hopes
     to resolve the problem by October of this year.14


Research and Data Development Provided by: Drew Beck, Research Assistant

Under the Supervision and Coordination of: Dr. Samuel Lee Hancock, CM, Executive Director

  Greece, State Department Background Notes (
  “Gov't steadfast in goal to bring fiscal deficit below 3.0 pct in 2006, FinMin says” Athens News Agency

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