The main industries of Greece include textiles, chemicals, metals, wine, food processing, tobacco, cement, oil refineries. Its major trading partners are Germany, Italy, France, the U.S., the U.K. and the Netherlands. The labor force is allocated in services (45%), industry (28%) and agriculture (27%). According to official measurements, the per capita income is around $9,000 (or 70% of the EU average), but according to many Greek economists who study tax evasion (a phenomenon which has assumed giant proportions in Greece), the real income is at least double that figure. This becomes quite obvious when observing the standard of living in Greece.
Greece has a relatively high inflation rate (3.5%), and a high unemployment rate (11%). The growth rate is now 4-5%. For a long period of time (1953-1973), Greece was second in the world in growth rates after Japan. Some other interesting information concerning the economic and social conditions in Greece include: Television sets: 1 per 3.7 persons, Telephones: 1 per 1.9 persons (cellular phones: 1 per 1,6 persons!), Cars 1 per 3 persons, Life expectancy at birth: 75 male, 81.5 female (the highest in the European Union), Births: 10 per 1,000, Deaths: 9 per 1,000, Infant mortality: 8.1 per 1000. Illiteracy: 4% men, 9% women. Greece is a member of the European Union, NATO and OECD, and many other international organizations.
A VERY BRIEF HISTORICAL ACCOUNT OF (MODERN) GREEK POLITICAL AND ECONOMICAL HISTORY
After 400 years of life under the rule of the Ottoman empire, the 1821 Greek Revolution was the first of its kind in the Balkans and Europe. The major European powers of the time (Great Britain, France, Russia and Austria), after many initial hesitations (and under the pressure of public opinion which was greatly influenced by authors like Lord Byron and Victor Hugo), decided to help the Greeks in their War of Independence against the Ottomans, while at the same time bringing Greece under their sphere of influence. The Greek State was recognized officially in 1827 and for many decades remained a small dot on the map, a tiny country with a great deal of problems, caught in the middle of a continuous tug-of-war between the great powers. Furthermore, the Greek state was conceived (from its very beginning) as the capsule of a greater state that would include all the historical Greek world (or at least the places where Greek population was predominant).
After 1880 and the decisive victory of the U.K. in the struggle for influence, Greece transformed itself into a modern country, ready to expand in any way possible: From 1912 to 1922, Greece managed to liberate the greatest part of the historical Greek world and to lose the rest forever. Even though the "Greek peninsula" and all but two of the Aegean Islands are now part of Greece, the western coast of Asia Minor and Constantinople (now Istanbul) were lost.
Unfortunately, the problems continued over the following years. From 1922 to 1936, the political situation was rather unstable (accentuated by coups, elections, switches from republicanism to monarchy and vice versa), but the political instability stopped in 1936 with the dictatorship imposed by the right-wing politician Ioannis Metaxas (with the help of King George II and of Great Britain), which lasted until the end of 1940. During all these years, the improvement of economic and social conditions was steady, despite the need for the integration in the Greek society of more than 2 million Greek refugees from Turkey (due to the exchange of populations).
At the end of 1940, Mussolini's Italy attacked Greece (which was always an ally of the U.K.) and was defeated despite the disparity of military forces. But in the beginning of 1941 Germany also attacked Greece at a different front. Despite the efforts of the Greek army and the help of Britain, Greece was occupied by the Axis powers (after 6 months of war). But the problems of Greece didn't stop with the end of World War II. Immediately following the liberation of the country by Greek and English troops at the end of 1944, the Greek Communist Party started a civil war which ended in 1949 (with a brief recess from 1945 to 1946). During the civil war, Greece was "transferred" from the British influence to the American one. With the help of the United States (under the "Truman Doctrine" and later under the "Marshall Plan"), the Greek state managed to defeat the communists and to recover financially. From 1950 to 1967, Greece was a parliamentary democracy with a King as the head of state, and many political problems (the King, the U.S., the military establishment and many other forces actively interfered with the political process).
However, 1953 was the starting point of the economic "Greek miracle". For twenty years, Greece had the highest growth rate internationally (after Japan). Despite the many political problems (which included a military junta from 1967 to 1974, the Cyprus problem and the outlawing of the Greek Communist Party from 1948 to 1974), Greece managed to transform itself, over a period of thirty years, from a destroyed (due to a long series of wars), underdeveloped small country to a country worthy of becoming a member of the (then) European Communities. Greece was accepted as the 10th member of the ECC in 1/1/1981. At the time, most of its economic indicators were better or equal to Ireland's (that was already a member), Spain's and Portugal's (which were to become members in 1986). The "Greek miracle", which was a textbook example, was basically the result of the policies of the Conservative politician Konstantinos Karamanlis who governed Greece from 1955 to 1963 and from 1974 to 1980, with a mix of Keynesian and Free-Market policies.
In parallel with the economic progress, the political situation was stabilized, the 1975 constitution constituted a presidential parliamentary republic, the Communist Party was recognized as a legitimate party in 1974 and the political process was normalized. The two big parties, the conservative "New Democracy" (founded by Karamanlis) and the "Panhellenic Socialist Movement" (PASOK) succeed each other in power without any lurches.
THE CURRENT ECONOMIC AND SOCIAL CONDITIONS
According to the numbers, Greece now finds itself in a satisfactory economic situation, but in the last place among the European Union countries. However, despite the inflation, the national debt and the high unemployment rate, the living standard in Greece is higher than several European Union countries. Perhaps this is an exaggeration, but the facts remain:
- The numbers do not represent the truth. The informal sector of the
Greek Economy is large. Many categories of citizens manage to escape
from time to time the attention of the Revenue Service and there is
arguably no citizen who does not make a decent effort to hide something
from it. This is the result of a rather archaic revenue system, a weak
public administration and, of course, the avoidance of assumption of the
political cost on the part of Greek politicians (even though during the
last 3-4 years the situation has improved due to the pressure of the
European Union).
- Greece is the most homogeneous country in Europe and one of the most homogeneous countries in the world, with an almost 97% majority of citizens sharing the same national identity, religion (Greek Orthodox Christians), language and race. This means that there are no great social and political disturbances (especially since the restoration of democracy in 1974) or other similar problems. Greek society is very coherent and the Greek family, a basic social institution, seems strong enough to support its members even at the most difficult times. As a result, the high rate of unemployment does not spawn problems like homelessness or a high criminality rate.
A very characteristic phenomenon which illustrates the current situation of the Greek Economy is that Greek businesses have expanded in the Balkans after the fall of communism and they share a significant percentage of investments in the new democracies (esp. Bulgaria, Romania and the former Soviet Union). The economy of Albania is dependent on Greece, since almost 500,000 Albanians are currently working in Greece (most of them as illegal aliens). To many observers, this is the best time for a great economic expansion of Greece because of its unique geographical position combined with the advantage of being the foremost country member of the European Union within a very sensitive region. Furthermore, its businesses have the know-how of functioning within a "difficult" environment. The only set-back to this progress could be the tension in Greek-Turkish relations that is due mostly to the Cyprus problem
Aristides N. Hatzis
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