Greece is a nation of ten-and-three-quarters million people is southern Europe, bordering the Aegean Sea, Ionian Sea, and the Mediterranean Sea, between Albania and Turkey. A peninsular country, Greece possesses an archipelago of about 2,000 islands. It has a strategic location dominating the Aegean Sea and southern approach to Turkish Straits.
Greece achieved independence from the Ottoman Empire in 1829.
During the second half of the 19th century and the first half of the 20th century, it gradually added neighboring islands and territories, most with Greek-speaking populations.
In World War II, Greece was first invaded by Italy (1940) and subsequently occupied by Germany (1941-44); fighting endured in a protracted civil war between supporters of the king and other anti-Communists and Communist rebels. Following the latter's defeat in 1949, Greece joined NATO in 1952.
In 1967, a group of military officers seized power, establishing a military dictatorship that suspended many political liberties and forced the king to flee the country.
In 1974, democratic elections and a referendum created a parliamentary republic and abolished the monarchy.
In 1981, Greece joined the EC (now the European Union); it became the 12th member of the European Economic and Monetary Union in 2001. In 2010, the prospect of a Greek default on its euro-denominated debt created severe strains within the EMU and raised the question of whether a member country might voluntarily leave the common currency or be removed.
Its major environmental issues include air pollution and water pollution. Greece is susceptible to severe earthquakes and vocanism.
Greece and Turkey continue discussions to resolve their complex maritime, air, territorial, and boundary disputes in the Aegean Sea. Cyprus is a significant issue of dispute with with Turkey. Greece rejects the use of the name Macedonia or Republic of Macedonia. The mass migration of unemployed Albanians still remains a problem for developed countries, chiefly Greece and Italy.
Location: Southern Europe, bordering the Aegean Sea, Ionian Sea, and the Mediterranean Sea, between Albania and Turkey
Geographic Coordinates: 39 00 N, 22 00 E
Area: 131,957sq km (land: 130,647 sq km; water: 1,310 sq km)
Coastline: 13,676 km
territorial sea: 12 nm
continental shelf: 200 m depth or to the depth of exploitation
Natural Hazards: severe earthquakes
Terrain: mostly mountains with ranges extending into the sea as peninsulas or chains of islands. The highest point is Mount Olympus (2,917 m).
Climate: temperate; mild, wet winters; hot, dry summers
Topography of Greece. Cource: Wikimedia Commons
Ecology and Biodiversity
Ecoregions of Greece. Source: World Wilkdlife Fund.
- Illyrian deciduous forests
- Pindus Mountains mixed forests
- Balkan mixed forests
- Aegean and Western Turkey sclerophyllous and mixed forests
- Rodope montane mixed forests
- Crete Mediterranean forests
- Biological diversity in the Mediterranean Basin
- Meteora Group of Monasteries, Greece
- Value of Mediterranean forests
- Mediterranean Sea large marine ecosystem
|This northwest-looking photo displays the rugged, mountainous landscape of Greece. Two major landform regions are captured in the photo - the northwest-southeast-trending Pindus Mtns. in central Greece north of the Gulf of Corinth and the Peloponnese Peninsula south of the Gulf (center of the photo). This rugged terrain caused the Greeks to become a seafaring people, second only to the Norwegians in Europe. The capital of Athens (lighter area) is barely discernible along the southern edge of the broad peninsula near the eastern edge of the photograph. Image courtesy of NASA.|
|Crete, the largest island belonging to Greece, is featured in this image acquired on March 28, 2006. The mainland portion of Greece, numerous other Greek isles, and Turkey are also visible in the image, distributed across the top of the image from left to right, respectively. A small portion of Africa (Libya’s Banghazi region) can also been seen in the bottom left corner. Source: NASA. Credit: Jeff Schmaltz|
|This view illustrates the center of Santorini Volcano, located approximately 120 km (75 mi) north of Crete in the Aegean Sea. One of the largest volcanic eruptions in the past 10,000 years occurred approximately 1630 B.C. on this island. The cataclysm created the present-day islands and caldera bay of Santorini Volcano. The caldera rim is clearly visible in this image as a steep cliff forming the western shoreline of the island of Thera, the largest of the remnant islands. The white rooftops of cities and towns also help trace the caldera rim. Image courtesy of NASA.|
|Agio Triada Monastery is one of six remaining monasteries in the Meteora region that are listed as UNESCO World Heritage sites. Each of these monasteries is built on a natural sandstone pillar.|
|A view of the city of Athens from the Acropolis.|
People and Society
Population: 10,760,136 (July 2011 est.)
Greece was inhabited as early as the Paleolithic period and by 3000 BC had become home, in the Cycladic Islands, to a culture whose art remains among the most evocative in world history. In the second millennium BC, the island of Crete nurtured the maritime empire of the Minoans, whose trade reached from Egypt to Sicily. The Minoans were supplanted by the Mycenaeans of the Greek mainland, who spoke a dialect of ancient Greek. During the Roman, Byzantine, and Ottoman Empires (1st-19th centuries), Greece's ethnic composition became more diverse. The roots of Greek language and culture date back at least 3,500 years, and modern Greek preserves many elements of its classical predecessor.
Eastern Orthodox Christianity is the dominant religion in Greece and receives state funding. During centuries of Ottoman domination, the Greek Orthodox Church preserved the Greek language and cultural identity and was an important rallying point in the struggle for independence. There is a centuries-old Muslim religious minority concentrated in Thrace and an estimated 300,000 legal Muslim immigrants living elsewhere in the country. Smaller religious communities in Greece include Old Calendar Orthodox, Catholics, Protestants, Jews, Jehovah's Witnesses, and Mormons.
Greek education is free and compulsory for children between the ages of 6 and 15. Overall responsibility for education rests with the Ministry of National Education and Religious Affairs. Private colleges and universities (mostly foreign) have campuses in Greece despite the fact that their degrees are not recognized by the Greek state. Entrance to public universities is determined by state-administered exams.
Ethnic groups: Greek 93%, other (foreign citizens) 7% (2001 census). Note: percents represent citizenship, since Greece does not collect data on ethnicity
0-14 years: 14.2% (male 787,143/female 741,356)
15-64 years: 66.2% (male 3,555,447/female 3,567,383)
65 years and over: 19.6% (male 923,177/female 1,185,630) (2011 est.)
Population Growth Rate: 0.06% (2012 est.)
Birthrate: 9.08 births/1,000 population (2012 est.)
Death Rate: 10.8 deaths/1,000 population (July 2012 est.)
Net Migration Rate: 2.32 migrant(s)/1,000 population (2012 est.)
Life Expectancy at Birth: 80.05 years
male: 77.48 years
female: 82.79 years (2012 est.)
Total Fertility Rate: 1.39 children born/woman (2012 est.)
Languages: Greek (official) 99%, other (includes English and French) 1%
Literacy (age 15 and over can read and write): 96% (2001 census)
Urbanization: 61% of total population (2010) growing at an annual rate of change of 0.6% (2010-15 est.)
The Greek War of Independence began in 1821 and concluded in 1830 when England, France, and Russia forced the Ottoman Empire to grant Greece its independence under a European monarch.
At independence, Greece had an area of 47,515 square kilometers (18,346 square mi.), and its northern boundary extended from the Gulf of Volos to the Gulf of Arta. Under the influence of the "Megali Idea," which in its most broad interpretation meant the expansion of the Greek state to include all areas where significant Greek communities existed, Greece acquired the Ionian islands in 1864; Thessaly and part of Epirus in 1881; part of Macedonia, Crete, Epirus, and the Aegean islands in 1913; western Thrace in 1918; and the Dodecanese islands in 1947.
Greece entered World War I in 1917 on the side of the Allies. After the war, Greece took part in the Allied occupation of Turkey, where many Greeks still lived. In 1921, the Greek army marched toward Ankara, but was defeated by Turkish forces led by Kemal Mustapha Ataturk and was forced to withdraw. In an exchange of populations under the Treaty of Lausanne, more than 1.3 million refugees from Turkey poured into Greece, and nearly 800,000 Greek Turks were sent to Turkey. This large influx of people created enormous challenges for the Greek economy and society.
Greek politics, particularly between the two world wars, involved a struggle for power between monarchists and republicans. Greece was proclaimed a republic in 1924, but George II returned to the throne in 1935. A plebiscite in 1946 upheld the monarchy, which was finally abolished by referendum on December 8, 1974.
Greece's entry into World War II was precipitated by the Italian invasion on October 28, 1940. Despite Italian superiority in numbers and equipment, determined Greek defenders drove the invaders back into Albania. Hitler was forced to divert German troops to protect his southern flank and overran Greece in 1941. Following a very severe German occupation in which many Greeks died (including over 90% of Greece's Jewish community) German forces withdrew in October 1944, and the government-in-exile returned to Athens.
After the German withdrawal, the principal Greek resistance movement, which was controlled by the communists, refused to disarm. A banned demonstration by resistance forces in Athens in December 1944 ended in battles with Greek Government and British forces. Continuing tensions led to the outbreak of full-fledged civil war in 1946. First the United Kingdom and later the U.S. gave extensive military and economic aid to the Greek Government. In 1947, Secretary of State George C. Marshall implemented the Marshall Plan under President Truman, which focused on the economic recovery and the rebuilding of Europe. The U.S. contributed hundreds of millions of dollars to rebuild Greece’s buildings, agriculture, and industry.
In August 1949, the Greek national army forced the remaining insurgents to surrender or flee to Greece's communist neighbors. The insurgency resulted in 100,000 killed, 700,000 displaced persons inside the country, and catastrophic economic disruption. This civil war left Greek society deeply divided between leftists and rightists.
Greece became a member of NATO in 1952. From 1952 to late 1963, Greece was governed by conservative parties--the Greek Rally of Marshal Alexandros Papagos and its successor, the National Radical Union (ERE) of Konstantinos Karamanlis. In 1963, the Center Union Party of George Papandreou was elected and governed until July 1965. It was followed by a succession of unstable coalition governments.
On April 21, 1967, just before scheduled elections, a group of colonels led by Col. George Papadopoulos seized power in a coup d’état. The junta suppressed civil liberties, established special military courts, and dissolved political parties. Several thousand political opponents were imprisoned or exiled to remote Greek islands. In November 1973, following an uprising of students at the Athens Polytechnic University, General Dimitrios Ioannides replaced Papadopoulos and tried to continue the dictatorship.
In July 1974, the Greek junta sponsored a coup in Cyprus led by extremist Greek Cypriots against the government of President Makarios, citing his alleged pro-communist leanings and his perceived abandonment of enosis, or political union with Greece. Turkey, citing the 1960 Treaty of Guarantee, intervened militarily to protect Turkish Cypriots. In a two-stage offensive, Turkish troops took control of 38% of the island. Almost all Greek Cypriots subsequently fled south while almost all Turkish Cypriots moved to the north.
Senior Greek military officers withdrew their support from the junta, which toppled. Leading citizens persuaded Karamanlis to return from exile in France to establish a government of national unity until elections could be held. Karamanlis' newly organized party, New Democracy (ND), won elections held in November 1974, and he became Prime Minister.
Following the 1974 referendum, the parliament approved a new constitution and elected Constantine Tsatsos as president of the republic. On January 1, 1981, Greece became the 10th member of the European Community (now the European Union--EU).
Parliamentary elections were held March 8, 2004, and ND won 165 seats to the Panhellenic Socialist Movement’s (PASOK) 117; Konstantinos Karamanlis, ND leader and the nephew of the former prime minister of the same name, became Prime Minister. Karolos Papoulias was elected President by parliament in February 2005. On October 4, 2009, PASOK won an early parliamentary election with 160 seats to ND’s 91. PASOK leader George Papandreou succeeded Karamanlis as Prime Minister. On February 3, 2010, Papoulias was re-elected President by parliament with a majority of 266 votes out of 300. On November 11, 2011, Papandreou stepped down as prime minister to make way for a coalition government led by Lucas Papademos (PASOK).
Greece is a parliamentary republic and last amended its constitution in May 2008. There are three branches of government. The executive includes the president, who is head of state, and the prime minister, who is head of government. There is a 300-seat unicameral "Vouli" (legislature). The judicial branch includes a Supreme Court. Greece is implementing a program (“Kallikratis”) that reorganized and consolidated its system of local governments into 13 regional districts and 325 municipalities. Suffrage is universal at 18.
Government Type: parliamentary republic
Capital: Athens 3.252 million (2009)
Other Major Cities: Thessaloniki 834,000 (2009)
Administrative divisions: 13 regions (perifereies, singular - perifereia) and 1 autonomous monastic state* (aftonomi monastiki politeia);
Autonomous monastic state
Independence Date: 1829 (from the Ottoman Empire)
Legal System: civil legal system based on Roman law. Greece accepts compulsory International Court of Justice (ICJ) jurisdiction with reservations; and accepts International criminal court (ICCt) jurisdiction
International Environmental Agreements
Greece is party to international agrements on: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Sulfur 94, Antarctic-Environmental Protocol, Antarctic-Marine Living Resources, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, and Wetlands.
It has signed, but not ratified international agrements on: Air Pollution-Persistent Organic Pollutants, Air Pollution-Volatile Organic Compounds.
Greece's foreign policy is generally aligned with that of its EU partners. Greece maintains full diplomatic, political, and economic relations with its Southeast European neighbors, except with the Republic of Macedonia (see below), and has played an important role as a leader of the region's Euro-Atlantic integration process. It provides peacekeeping and training contingents for Bosnia, Kosovo, and Afghanistan. Prominent issues in Greek foreign policy include Balkan integration and the name dispute with Macedonia, Greek-Turkish differences in the Aegean, the reunification of Cyprus, illegal migration, Turkish accession to the EU, regional energy development, Middle East relations, including strengthening ties to Israel, international peacekeeping operations, and Greek-American relations.
Balkans and the “Name Issue” with the Republic of Macedonia
The Papandreou government entered office with a new initiative--Agenda 2014--to spur the integration of the Western Balkan countries into Euro-Atlantic structures by the 100th anniversary of the outbreak of World War I in Sarajevo. Greece has been a strong supporter of regional economic development and Greek firms, particularly banks, are among the most heavily invested in Balkan countries. Greece has not recognized Kosovo’s independence, but remains a significant contributor to the NATO-led Kosovo Force (KFOR).
The Greek dispute with its northern neighbor over its constitutional name, Republic of Macedonia, has been an important issue in Greek politics since 1992. Greece opposed the use of "Macedonia" by the government in Skopje, claiming that the term refers to a region of Greece that is steeped in Greek identity and culture and should not be used by a foreign country. Mediation efforts by the UN and the United States brokered an interim accord whereby Greece recognized the country as the “Former Yugoslav Republic of Macedonia” (FYROM) in September 1995 and lifted objections to its neighbor’s membership in international organizations under that provisional name until the two countries could reach a mutually agreeable solution to the dispute. At NATO's Bucharest Summit in April 2008, NATO Allies agreed that an invitation to the Republic of Macedonia would be extended as soon as a mutually acceptable solution to the name issue is reached.
The Republic of Macedonia’s EU accession path has been affected as well: on December 8, 2009, absent a consensus, the EU Council of foreign ministers delayed a decision on opening accession talks with the Republic of Macedonia. On December 5, 2011, the International Court of Justice ruled that Greece violated the interim accord by blocking the Republic of Macedonia’s application to join NATO. Talks on the name question continue under UN auspices.
Greece and Turkey have unresolved disagreements regarding the Aegean maritime boundary, the treatment of the Orthodox Church and Greek minority in Istanbul, the treatment of the Muslim (primarily ethnic Turkish) minority in western Thrace, and the expanding flows of undocumented migrants, many from zones of conflict in South Asia and the Middle East, across the Aegean into Greece.
At times over the past 3 decades, tensions between Greece and Turkey have almost reached the point of armed confrontation. A significant breakthrough in relations took place when major earthquakes hit Turkey and Greece in 1999. Both countries and peoples responded generously to the other's need, helping turn around official perceptions that rapprochement was too risky politically. Since that time, Greek and Turkish foreign ministers have increased the quantity and quality of bilateral exchanges, both official and unofficial. Greece supports Turkey’s EU aspirations, provided that it meets all obligations toward the EU and its member states without any special concessions.
Shortly after his October 2009 inauguration, Prime Minister Papandreou visited Istanbul and met with Turkish Prime Minister Recep Tayyip Erdogan, signaling his intention to reinvigorate bilateral relations and increase rapprochement between the two countries, which Papandreou had spearheaded when he was Greece’s Foreign Minister from 1999 to 2004. Following an exchange of letters between Erdogan and Papandreou and a visit to Athens by the Turkish Prime Minister, Greece and Turkey agreed to the creation of a “High Level Strategic Cooperation Council” headed by the two prime ministers to increase bilateral dialogue. The prime ministers, as well as their foreign ministers, met routinely on the margins of international gatherings to continue their dialogue.
Since 1974 the largest source of tension in the bilateral relationship between Greece and Turkey has been the Cyprus conflict. After the UN-brokered “Annan Plan” to reunify the island failed to gain support among Greek Cypriots in a 2004 referendum, the Government of the Republic of Cyprus in September 2008 reopened inter-communal talks with the Turkish Cypriot side toward a comprehensive settlement on the basis of a bi-zonal, bi-communal federation. The UN has welcomed this development and continues to encourage both parties to address the key problems of the Cyprus issue. Greece has expressed its support for the talks.
The Middle East
Greece has a special interest in the Middle East because of its geographic position and its economic and historic ties to the area. Greece cooperated with allied forces during the 1990-91 Persian Gulf War. Since 1994, Greece has signed defense cooperation agreements with Israel and Egypt. In recent years, Greek leaders have hosted several meetings of Israeli and Palestinian politicians to contribute to the peace process. While Greece has been traditionally supportive of Palestinian claims, beginning in the late 1990s, efforts to strike a more balanced relationship with Israel received a boost. Israeli President Moshe Katsav visited Greece in 2006, the first-ever official visit by an Israeli head of state. Prime Minister Papandreou and Israeli Prime Minister Netanyahu exchanged official visits in 2010. Since then, Greek and Israel have participated in joint military exercises, discussed a more assertive tourism strategy, and exchanged a number of high-level diplomatic visits. The Greek American and Jewish American communities have also sought to improve relations.
Greece has supported NATO’s presence in Afghanistan since NATO took command of the International Security Assistance Force (ISAF) in 2003. Greece has contributed approximately 75 trainers to the NATO Training Mission - Afghanistan, maintains a small headquarters element with ISAF in Afghanistan, and completed a 6-month command rotation of Kabul airport in October 2010. Greece provided over €72 million (about $96 million) in development and humanitarian aid to Afghanistan between 2002 and 2009.
Greece’s special political and economic relationships with countries in the Balkans play an important role in reinforcing democratic development there. The country has made positive contributions to Balkans reconciliation through its involvement in the NATO-led Kosovo Force (KFOR), NATO’s long-running (and now concluded) SFOR mission in Bosnia, and SFOR’s follow-on mission, the EU’s operation “Althea.” There are presently 44 staff members in Althea and over 200 Greek troops in Kosovo.
Greece has been an active participant in NATO’s Ocean Shield counter-piracy operation providing protection for World Food Program chartered and merchant vessels off the coast of Somalia, and routinely contributes to NATO maritime operations. Greece previously led, and it continues to participate in, the European Union’s “Atalanta” counter-piracy missions. The U.S. Navy’s naval support base at Souda Bay on the island of Crete provides operational and logistical support to European Command (EUCOM), Central Command (CENTCOM), the U.S. Fifth and Sixth fleets, and NATO forces engaged in missions in Iraq, Afghanistan, the Balkans, and the Middle East. Souda played an important support role for NATO forces during Operation Unified Protector in Libya in 2011.
Total Renewable Water Resources: 72 cu km (2005)
Freshwater Withdrawal: 8.7 cu km/yr (16% domestic, 3% industrial, 81% agricultural)
Per Capita Freshwater Withdrawal: 782 cu m/yr (1997)
Agricultural products: wheat, corn, barley, sugar beets, olives, tomatoes, wine, tobacco, potatoes; beef, dairy products
Irrigated Land: 15,500 sq km (2008)
Natural Resources: lignite, petroleum, iron ore, bauxite, lead, zinc, nickel, magnesite, marble, salt, hydropower potential
arable land: 20.45%
permanent crops: 8.59%
other: 70.96% (2005)
Greece enjoys a geostrategic position for the transit of oil and gas from Caspian Basin and western Asia producers to the consumers of that energy in Europe. Greece is seeking to become an energy hub for these resources and has undertaken policies to that end. Taking advantage of its geographic position, Greece has identified four regional energy projects as top priorities. Greece, along with Turkey and Italy, is a partner of the ITGI (Interconnector Turkey-Greece-Italy) gas pipeline that, if fully realized, would transport up to 11 billion cubic meters of mostly Azerbaijani (and possibly other) gas to southern Europe by 2012. The ITGI currently transmits about 0.75 billion cubic meters of gas from Turkey to Greece; however, Turkey and Azerbaijan need to conclude a gas transit and pricing agreement before the full potential of the project can be realized. An ancillary project to ITGI is the IGB (Interconnector Greece- Bulgaria), which is a gas pipeline spur, linking ITGI with the Bulgarian market.
Greece also has been discussing for many years the development of an oil pipeline to transport Russian oil between the Bulgarian Black Sea port of Burgas and the Greek port of Alexandroupolis on the Aegean coast. The purpose of the project is to reduce oil tanker ship traffic from the Black Sea through the crowded Bosporus strait, reducing the risk of environmental degradation and speeding the flow of oil to Western markets. The Burgas-Alexandroupolis pipeline currently is being held up by an incomplete environmental impact assessment for the Burgas terminal area. In 2007, Greece signed an agreement with Russia to participate in the proposed Russian South Stream natural gas pipeline, which would run along the Black Sea seabed and emerge in Bulgaria, eventually passing through Greece. This megaproject remains in the conceptual stages with challenges associated with the technical feasibility of transiting the Black Sea, and questions regarding the available sources and quantities of gas to fill the pipeline.
In August 2011, the Ministry of Environment, Energy, and Climate Change, through the recently established agency “Greek Regulatory Corporation for Hydrocarbons SA”, conducted an international public invitation for participation in non-exclusive seismic surveys for hydrocarbon.
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 15% 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.
Greece adopted the euro (€) as its currency in January 2002. The adoption of the euro provided Greece (formerly a high inflation risk country under the drachma) with access to competitive loan rates and also to low rates of the Eurobond market. This led to a dramatic increase in consumer spending, which gave a significant boost to economic growth. Between 1997 and 2007, Greece averaged 4% GDP growth, almost twice the European Union (EU) average.
Greece violated the EU's Growth and Stability Pact budget deficit criterion of no more than 3% of GDP from 2001 to 2006, but finally met that criterion in 2007-08, before exceeding it again in 2009, with the deficit reaching 15% of GDP. Austerity measures reduced the deficit to 11% of GDP in 2010 and about 9% in 2011.
As with other European countries, the financial crisis and resulting slowdown of the real economy have taken their toll on Greece’s rate of growth, which slowed to 2.0% in 2008. The economy went into recession in 2009 and contracted by 2.4% as a result of the world financial crisis and its impact on access to credit, world trade, and domestic consumption--the engine of growth in Greece.
High growth and low interest rates had masked major fiscal and structural weaknesses that were aggravated by the global financial crisis and ensuing recession. As a result of a high 2009 fiscal deficit (revised upward by Eurostat to 15.4% of GDP from 13.6% of GDP), mounting entitlement costs, and deteriorating competitiveness resulting from higher than Eurozone-average inflation and rigidities in product and labor markets, markets in early 2010 began to question the sustainability of Greece’s public debt (2009 debt revised upward by Eurostat from 115.1% of GDP to 126.8% of GDP). Ever-increasing market doubts and pressures resulted in higher and higher borrowing costs throughout the winter and spring of 2010. Eventually, unsustainable borrowing costs caused Greece to lose market access, forcing Prime Minister Papandreou on April 23, 2010 to request an emergency assistance program from his Euro-area partners and the International Monetary Fund (IMF). In early May, the Greek parliament, Euro-area leaders, and the IMF Executive Board approved a 3-year €110 billion (about $145 billion) adjustment program to be monitored jointly by the European Commission, the European Central Bank, and the IMF. Under the program, Greece has promised to undertake major fiscal consolidation and to implement substantial structural reforms in order to place its debt on a more sustainable path and improve its competitiveness so that the economy can re-enter a positive growth trajectory. Specifically, the 3-year reform program includes measures to cut government spending, reduce the size of the public sector, tackle tax evasion, reform the health care and pension systems, and liberalize the labor and product markets.
Since that time, the Greek Government has legislated a number of these important reforms and reduced the deficit from 15.4% of GDP in 2009 to 10.6% of GDP in 2010. Slow implementation of the reforms, along with a deeper than projected recession, led Eurozone leaders to a new agreement on October 26-27, 2011. It includes a “voluntary” nominal loss of 50% on private holdings of Greek Government debt (known as Private Sector Involvement, PSI) worth €100 billion (approx. $133 billion), an EU contribution to PSI of €30 billion (approx. $40 billion), and an additional €100 billion (approx. $133 billion) in official loans through 2014.
The global crisis and the consequent recession caused an increase in unemployment to12.5% in 2010 and to 20.7% as of March 2012. Foreign direct investment (FDI) inflows to Greece have dropped, and efforts to revive them have been only partially successful as a result of declining competitiveness and a high level of red tape and bureaucracy. At the same time, Greek investment in Southeast Europe and Turkey has increased, leading to a net FDI outflow in some years.
European leaders and the IMF agreed in October 2011 to provide Athens a second bailout package of $169 billion. The second deal however, calls for Greece's creditors to write down a significant portion of their Greek government bond holdings. In exchange for the second loan Greece has promised to introduce an additional $7.8 billion in austerity measures during 2013-15. However, these massive austerity cuts are lengthening Greece's economic recession and depressing tax revenues. Greece's lenders are calling on Athens to step up efforts to increase tax collection, privatize public enterprises, and rein in health spending, and are planning to give Greece more time to shore up its economy and finances. Many investors doubt that Greece can sustain fiscal efforts in the face of a bleak economic outlook, public discontent, and political instability.
Greece has a predominately service economy, which (including tourism) accounts for almost 79% of GDP. In 2010, the Greek merchant navy was the largest in the world at 15.96% of the world's total capacity. Other important sectors include food processing, tobacco, textiles, chemicals (including refineries), pharmaceuticals, cement, glass, telecommunication and transport equipment. Agricultural output has steadily decreased in importance over the last decade, accounting now for only 3.3% of total GDP. The EU is Greece’s major trading partner, with more than half of all Greek two-way trade being intra-EU. Greece runs a perennial merchandise trade deficit, and 2010 imports totaled $64.5 billion against exports of $22 billion. Tourism and shipping receipts together with EU transfers make up for much of this deficit.
GDP: (Purchasing Power Parity): $308.3 billion (2011 est.)
GDP: (Official Exchange Rate): $312 billion (2011 est.)
GDP- per capita (PPP): $27,600 (2011 est.)
GDP- composition by sector:
services: 78.9% (2011 est.)
Industries: tourism, food and tobacco processing, textiles, chemicals, metal products; mining, petroleum
Currency: Euros (EUR)