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Greece: country overview

15 June 2012
by Ina Dimireva -- last modified 30 January 2017

Greece joined the EC (now the EU) in 1981; it became the 12th member of the European Economic and Monetary Union in 2001. Greece has suffered a severe economic crisis since late 2009, due to nearly a decade of chronic overspending and structural rigidities. Since 2010, Greece has entered three bailout agreements with the European Commission, the European Central Bank (ECB), the IMF, and with the third, the European Stability Mechanism (ESM). The Greek Government agreed to its current, $96 billion bailout in August 2015, which will conclude in August 2018. The most important sectors of Greece's economy in 2015 were wholesale and retail trade, transport, accommodation and food services (25.4 %), public administration, defence, education, human health and social work activities (21.0 %) and real estate activities (17.2 %).Greece's main export partners ar y and Turkey, while its main import partners are Germany, Italy and Russia.


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Greek flag

Capital: Athens

Geographical size: 131 957 km²

Population: 10 858 018 (2015)

Population as % of total EU: 2.1 % (2015)

Gross domestic product (GDP): € 176.023 billion (2015)

Official EU language(s): Greek

Political system: parliamentary republic

EU member country since: 1 January 1981

Seats in the European Parliament: 21

Currency: Euro. Member of the eurozone since 1 January 2001

Schengen area member? Yes, Schengen Area member since 1 January 2000.

Presidency of the Council: Greece has held the revolving presidency of the Council of the EU 5 times between 1983 and 2014.

Map of Greece

Country overview

Located near the crossroads of Europe and Asia, Greece forms the southern extremity of the Balkan peninsula in south-east Europe. Its territory includes more than 2 000 islands in the Aegean and Ionian seas, of which only around 165 are inhabited. Mount Olympus is the highest point in the country.

Greece is one of the cradles of European civilisation, whose ancient scholars made great advances in philosophy, medicine, mathematics and astronomy. Their city-states were pioneers in developing democratic forms of government. The historical and cultural heritage of Greece continues to resonate throughout the modern world - in literature, art, philosophy and politics.

Modern Greece has a republican structure based on the constitution of 1975. The 300 members of the single-chamber parliament are elected for a period of four years. The country is divided into 13 administrative regions.

More than 50% of Greek industry is located in the Greater Athens area, the main economic sectors being agriculture, tourism, construction and shipping.

The best-known contemporary Greeks include the film-maker Kostas Gavras, the Nobel Prize winner Odysseus Elitis and composer Mikis Theodorakis.

Greek cuisine is based on goat meat and mutton. Fish dishes are also popular. Olive oil, which is produced in large quantities, adds to the distinctive taste of Greek food.

Economy overview

Greece has a capitalist economy with a public sector accounting for about 40% of GDP and with per capita GDP about two-thirds that of the leading euro-zone economies. Tourism provides 18% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP.

The Greek economy averaged growth of about 4% per year between 2003 and 2007, but the economy went into recession in 2009 as a result of the world financial crisis, tightening credit conditions, and Athens' failure to address a growing budget deficit. By 2013 the economy had contracted 26%, compared with the pre-crisis level of 2007. Greece met the EU's Growth and Stability Pact budget deficit criterion of no more than 3% of GDP in 2007-08, but violated it in 2009, with the deficit reaching 15% of GDP. Deteriorating public finances, inaccurate and misreported statistics, and consistent underperformance on reforms prompted major credit rating agencies to downgrade Greece's international debt rating in late 2009 and led the country into a financial crisis. Under intense pressure from the EU and international market participants, the government accepted a bailout program that called on Athens to cut government spending, decrease tax evasion, overhaul the civil-service, health-care, and pension systems, and reform the labor and product markets. Austerity measures reduced the deficit to 3% in 2015. Successive Greek governments, however, failed to push through many of the most unpopular reforms in the face of widespread political opposition, including from the country's powerful labor unions and the general public.

In April 2010, a leading credit agency assigned Greek debt its lowest possible credit rating, and in May 2010, the International Monetary Fund and euro-zone governments provided Greece emergency short- and medium-term loans worth $147 billion so that the country could make debt repayments to creditors. In exchange for the largest bailout ever assembled, the government announced combined spending cuts and tax increases totaling $40 billion over three years, on top of the tough austerity measures already taken. Greece, however, struggled to meet the targets set by the EU and the IMF, especially after Eurostat - the EU's statistical office - revised upward Greece's deficit and debt numbers for 2009 and 2010. European leaders and the IMF agreed in October 2011 to provide Athens a second bailout package of $169 billion. The second deal called for holders of Greek government bonds to write down a significant portion of their holdings to try to alleviate Greece's government debt burden. However, Greek banks, saddled with a significant portion of sovereign debt, were adversely affected by the write down and $60 billion of the second bailout package was set aside to ensure the banking system was adequately capitalized. In exchange for the second bailout, Greece promised to step up efforts to increase tax collection, to reduce the size of government, and to rein in health spending. These austerity measures were designed to generate $7.8 billion in savings during 2013-15, but in fact prolonged Greece's economic recession and depressed tax revenues.

In 2014, the Greek economy began to turn the corner on the recession. Greece achieved three significant milestones: balancing the budget - not including debt repayments; issuing government debt in financial markets for the first time since 2010; and generating 0.7% GDP growth — the first economic expansion since 2007.

Despite the nascent recovery, widespread discontent with austerity measures helped propel the far-left Coalition of the Radical Left (SYRIZA) party into government in national legislative elections in January 2015. Between January and July 2015, frustrations between the SYRIZA-led government and Greece's EU and IMF creditors over the implementation of bailout measures and disbursement of funds led the Greek government to run up significant arrears to suppliers and Greek banks to rely on emergency lending, and also called into question Greece's future in the euro zone. To stave off a collapse of the banking system, Greece imposed capital controls in June 2015 shortly before rattling international financial markets by becoming the first developed nation to miss a loan payment to the IMF. Unable to reach an agreement with creditors, Prime Minister Alexios TSIPRAS held a nationwide referendum on 5 July on whether to accept the terms of Greece's bailout, campaigning for the ultimately successful "no" vote. The TSIPRAS government subsequently agreed, however, to a new $96 billion bailout in order to avert Greece's exit from the monetary bloc. On 20 August, Greece signed its third bailout which allowed it to cover significant debt payments to its EU and IMF creditors and ensure the banking sector retained access to emergency liquidity. The TSIPRAS government — which retook office on 20 September after calling new elections in late August — successfully secured disbursal of two delayed tranches of bailout funds. Despite the economic turmoil, Greek GDP did not contract as sharply as feared, with official source estimates of a -0.2% contraction in 2015, boosted in part by a strong tourist season.

Useful links

The Commission's Representation in Greece

European Parliament office in Greece

Financial crisis: the Greek Loan Facility

The Prime Minister's Office

Tourist information

Source: European Commission, CIA - The World Factbook

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