EUROPEAN ECONOMIES

How Successful have the Respective Governments and the European Central Bank Been in Running the Greek and Spanish Economies over the Last Three Years?

How Successful have the Respective Governments and the European Central Bank Been in Running the Greek and Spanish Economies over the Last Three Years?

Economy of Greece

Overview

Greece has a capitalist economy with the 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. The Greek economy grew by nearly 4.0% per year between 2003 and 2007, due partly to infrastructural spending related to the 2004 Athens Olympic Games, and in part to an increased availability of credit, which has sustained record levels of consumer spending. But growth dropped to 2.9% in 2008. The economy went into recession in 2009 and contracted by 2.5%, as a result of the world financial crisis, tightening credit conditions, and Athens' failure to address a growing budget deficit, triggered by falling state revenues, and increased government expenditures. Greece violated the EU's Growth and Stability Pact budget deficit criteria of no more than 3% of GDP from 2001 to 2006, but finally met that criteria in 2007-08, before exceeding it again in 2009 by 12.7%. Public debt, inflation, and unemployment are above the euro-zone average; debt and unemployment rose in 2009, while inflation subsided. Eroding finances prompted major credit rating agencies in late 2009 to downgrade Greece's international debt rating, which has led to increased financial instability. Currently, the Greek Government is under intense pressure by the EU and international lenders to implement a medium-term austerity program that includes cutting government spending, reducing the size of the public sector, and reforming the labor and pension systems. Athens, however, faces long-term challenges to push through unpopular reforms in the face of often vocal opposition from the country's powerful labor unions and the general public. Greek labor unions are prepared to strike over new austerity measures and continued widespread unrest could lead to rioting or violence.

GDP (purchasing power parity):

$339.2 billion (2009 est.)

$347.9 billion (2008 est.)

$338.1 billion (2007 est.)

Note: data are in 2009 US dollars

GDP (official exchange rate):

$338.3 billion (2009 est.)

GDP - real growth rate:

-2.5% (2009 est.)

2.9% (2008 est.)

4% (2007 est.)

GDP - per capita:

$32,100 (2009 est.)

$32,400 (2008 est.)

$31,600 (2007 est.)

Note: data are in 2009 US dollars

GDP - composition by sector:

Agriculture: 3.4%

Industry: 20.8%

Services: 75.8% (2009 est.)

Labor force:

5.01 million (2009 est.)

Labor force - by occupation:

Agriculture: 12.4%

Industry: 22.4%

Services: 65.1% (2005 est.)

Unemployment rate:

8.9% (2009 est.)

7.65% (2008 est.)

Population below poverty line:

NA%

Household income or consumption by percentage share:

Lowest 10%: 2.5%

Highest 10%: 26% (2000 est.)

Distribution of family income - Gini index:

33 (2005)

35.4 (1998)

Investment (gross fixed):

15.6% of GDP (2009 est.)

Budget:

Revenues: $108.7 billion

Expenditures: $145.2 billion (2009 est.)

Public debt:

108.1% of GDP (2009 est.)

97.4% of GDP (2008 est.)

Inflation rate (consumer prices):

1% (2009 est.)

4.1% (2008 ...