Economy of Greece

By | April 29, 2022

According to cheeroutdoor, the Greek economy is a market economy with a large share of the public sector. Since the 1970s Greece was distinguished by rather weak economic development, cumbersome labor legislation, low GNP per capita, and high domestic debt. From Ser. 1990s Greece’s economy has noticeably stabilized due to the fact that the government has tightened economic measures to bring the economic performance of Greece to the criteria of the Maastricht agreement for the introduction in 2001 of a single European currency. In particular, Greece reduced its budget deficit to 0.8% in 2000, and in 2001 for the first time achieved a surplus of 0.1%. The tightening of the monetary policy allowed inflation to be reduced to 4% by the end. 1998, and in 2001 – up to 3.4% (the lowest figure in the last 29 years). In 2001, the GDP was 44,446 billion drachmas. GDP growth 6.3%. The country maintains a high unemployment rate of 9.6% (2002). GNP per capita approx. 3.8 million drachmas (2000). Further restructuring of the economy and the reduction of unemployment are the main tasks of today’s Greece.

Greece has traditionally been an agro-industrial country, but recently the importance of the service sector has greatly increased. Sectoral structure of the economy: industry – 22% of GDP, 21% of employees; agriculture – ca. 8% of GDP, 20% of employees; service sector – 70% of GDP and St. 59% employed.

Main industries: food, tobacco, textile, chemical, metalworking, mining, oil refining.

Mining in 1999 amounted to 1.87 million tons of bauxite, 61.8 million tons of lignite, 1.1 million tons of magnesite.

Agriculture continues to play an important role. Export of agricultural products – approximately 22% of total exports. Cultivated: wheat, corn, barley, sugar beets, olives, tomatoes, grapes (for wine production), tobacco, potatoes, beef cattle, dairy products are produced. Subtropical fruit growing and viticulture are developed. Sea fishing is one of the fastest growing industries. For 15 years, fishing has expanded and amounted to approx. 60% of the EU production of sea bass and sea bream, two of the most popular Mediterranean game fish species.

In the service sector, tourism and shipping have the largest share.

Tourism is the largest sector of the Greek economy (15th in the world tourism classification). In 2000, St. 13.5 million tourists. The main part (over 90%) are tourists from Europe. Tourism accounts for approx. 15% of GDP.

An important branch of the economy is sea freight: 1946 ships with a tonnage of St. 1000 register tons. The tonnage of the sea merchant fleet is 49.45 million dwt (2002). The Greek merchant fleet is in 1st place among the EU member states, amounting to approx. 50% of the total EU fleet, and 5th internationally.

The total length of railways is 2571 km, incl. 1565 km of standard gauge, 983 km of narrow gauge and 23 km of combined. Roads: total 117,000 km, 107,406 km paved (including 470 km high-speed highways), 9,594 km unpaved.

The system of inland waterways (total length – 80 km) consists of three rivers and three coastal channels, including the Corinth Canal (6 km). Pipeline transport: oil pipeline 26 km, product pipeline 547 km.

Main seaports: Piraeus, Thessaloniki, Elefsis, Alexandropolis. 79 airports, incl. 6 large.

Telephone communication covers the entire territory of the country. Total telephone subscribers – 5.431 million Internet users 1.4 million (2001), providers – 27.

The modern economic policy of Greece is determined by the need to maintain the norms of the eurozone. The government is taking measures to improve tax collection and tighten financial discipline: a more efficient tax collection system is being introduced, the number of tax incentives is being reduced, and additional taxes have appeared. Budget expenditures are growing slowly due to low growth rates of public sector wages. The improvement in the financial situation made it possible to reduce indirect taxes on fuel to reduce inflation.

It is noteworthy that the reduction of the budget deficit in Greece was achieved without resorting to cuts in social programs. However, increased social security spending and public hospital debts are forcing the government to launch social reforms against union resistance. The government also plans to privatize some of the leading state-owned enterprises.

The problem continues to be high public debt, although there is a clear trend towards its reduction: 108.2% of GDP in 1997, 103.8% in 1999 and 99.7% in 2001.

All R. 1990s banking sector was liberalized. Controlling stakes in almost all banks previously controlled by the state were put up for sale, which caused a wave of consolidation. Leading Greek banks have strong regional influence.

Important reforms of recent years are the complete liberalization of the telecommunications market, the transformation of the Public Energy Corporation into a joint-stock company for subsequent privatization, and the liberalization of the energy sector.

Greece receives financial assistance from the EU in the amount of approx. 4% of GDP annually. The funds are mainly directed to the development of transport infrastructure.

Greece’s foreign trade balance is negative. It is offset by a developed service sector: sea freight, tourism. Export: agricultural products, garments and textiles, cement, minerals. Main export partners (million drachmas, 2000): Germany (480), Italy (357), Great Britain (249), USA (211), Turkey (198). The EU countries account for up to 51.6% of all exports. In 2000, total exports (including services) amounted to 25% of GDP.

Imports: engineering products, vehicles, fuels, chemicals. The main suppliers of imported products are the EU countries 61% (including Italy 16%, Germany 16%, France 8%, UK 7%), USA 11%.

Economy of Greece