From 2003 to 2008, the Greek economy was strong, growing
at an average of 4% per year. In 2009, during the peak of the global financial
crisis, the Greek debt crisis began. The government announced that it had been
misreporting data on their financial situation including budget deficit and
debt levels. The global financial community responded by not allowing Greece to
borrow from financial markets, creating the looming likelihood of bankruptcy.
The result was three bailouts for Greece from the International Monetary Fund,
the European Central Bank and the European Commission. The bailouts came with
strict conditions, including dramatic cuts to spending and increased taxes. The
bailouts were not meant as a permanent fix, but were successful in keeping the
country out of bankruptcy. Since the bailouts were used to pay off other
countries and not invested into Greece, the Greek economy continued to slide.
Unemployment rose above 25% and gross domestic product continued to decrease. In 2014,
Greece finally had obtained a balanced budget, issued government debt for the
first time since 2010, and had positive GDP growth (Appendix 1). Over the last
few years, Greece has made considerable progress in restoring macro-economic
stability. Yet as of 2017, Greece had the second highest debt to GDP ratio in
the world after Japan, of 180% of GDP.
Greece has a capitalist, market economy. The public sector
accounts for roughly 40% of GDP, while tourism remains the leading industry at roughly
18% of GDP. Immigrants make up 1/5 of the overall work force, though mainly in low
skilled and agriculture jobs. It has been estimated that Greece’s black market
is approximately 20 to 25 percent of GDP, as more people have stopped reporting
income to avoid paying taxes. Greece remains a service-based economy
considering services contribute 80% of total GDP, while industry and
agriculture contribute 16% and 4%, respectively. The most prominent industries
in Greece include tourism, food and tobacco processing, textiles, chemicals,
metal products, mining and petroleum. The world’s second largest Coca-Cola bottling
plant, Coca-Cola HBC, has a majority of their operations located in Greece. Other
multinationals with major Greek operations include Nestlé, Kraft Foods,
Barilla, Cadbury, Unilever and General Mills. However, unemployment remains one
of the most difficult challenges Greece faces today. With a rate of 22.3% in
2017, Greece has one of the highest unemployment rates out of all developed
nations in the world (Appendix 2).
Greece is one of the poorest
countries in Southern Europe, yet still considered ‘wealthy’ when compared
relative to the rest of the world. Greece’s GDP per capita in 2016 was
$17,930.20 USD, not far behind prominent European countries such as Spain
($26,639.70) and Italy ($30,674.80). In 2014, 36% of the population lived below
the poverty line.
In 1981, Greece joined the European Union, and in 2002, they
adopted the Euro. In 2017, Greece imported $50.23 billion and exported $29.23
billion. Most popular exports include food and beverages, manufactured goods,
petroleum products, chemicals and textiles. Top trading partners include Italy,
Germany, China, Russia, Netherlands, France, Cyprus, Turkey, Bulgaria, US and
UK. While in the E.U., Greece has benefited from free trade with most of their
top trading partners. Almost all nations completely ceased foreign direct investment
into Greece during the height of the crisis, but it has increased six fold
since 2010 to over 3 billion USD in 2016 (Appendix 3). Greece has a strong
level of infrastructure including roads, airports, railways, ports and
terminals. Maintaining physical infrastructure is crucial for a successful
tourism industry. Greece has a moderate level of information technology infrastructure
such as telecommunications, primarily attributed to slow economic recovery.
As of July 2017, Greece had a population of 10,768,477 people.
They are 93% Greek yet 99% of the population speak the Greek. 98% are Greek
Orthodox while only 1.3% are Muslim. People between the ages of 25-54 make up
42.45% of the total population while 20% is 65 and over. Greece has 130,647
square kilometers of land, yet one third of the population lives in and around
the capital, Athens. Greece’s political situation has been unstable; the
governing party was re-elected during a snap election in 2015 while the E.U. sanctions
remain the one of the highest debated subjects. Over the last few years, Greece
has been at the centre of the refugee crisis since an estimated one million
refugees from Syria have passed through Greece into Europe since January 2015.
With more than 6000 islands and 16,000 kilometers of
coastline, Greece presents itself as the prime vacation destination for not
only Europe, but the rest of the developed world. Greece is one of the most visited
countries in the world due to its ancient culture and impeccable beauty. In
2016, over 30 million people travelled to Greece to visit beaches, islands and
historic monuments. With more than 4,000 years of recorded history, Greece has become
one of the main destinations for religious and cultural tourism with many museums
and monuments. Greece already has more than 700,000 hotel beds, 500 conference
facilities, and direct air travel into 20 destinations from major European
remains competitive in global markets by making food and agriculture one of
Greece’s most important sectors. Its geography and climate has given Greece a competitive
advantage over other countries in terms of agriculture and high quality food
and beverage. Top exports include vegetables, fruits, olive oil, dairy
products, fresh seafood, olives, raisins, wine, and tomato products. Farming and
food production is a traditional Greek occupation which has led to an increase
in the amount of food research, agricultural schools, and skilled farmers. In
2016, food and agriculture products made up over 25% of all exports.
is the crossroads of three continents, Europe, Africa and Asia. They have
connected people, goods and services, and cultures for centuries. Maritime transport
is considered to be the most important mode of transportation accounting for
80% of all global trade. Greece’s ability to be the gateway between the East
and West make it a highly attractive place to do business.
has a skilled workforce, educated in high-quality technical institutions. Around
70% of the Greek population speaks English. The need for automation and digitalization
in the public and private sector have made ICT expansion one of Greece’s top priorities.
In 2016, machinery and electronics made up around 10% of all exports.