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'''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 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 EU); 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.<ref name="CIA_GR" />
'''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 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 EU); 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.<ref name="CIA_GR" />


==Points of interest==
==Ancient Greece==
In [[Wikipedia:Classical Athens|Athens]], the constant shortages of grain and a need to import it from overseas caused its price to rise and fall according to supply. An army of grain inspectors, called ''Sitophylakes'', was appointed to set the price of grain. "...to see to it first that the grain was sold in the market at a just price, that the millers sold meal in proportion to the price of barley, that the bakers sold bread in proportion to the price of wheat, that the bread had the weight they had fixed." When this and other legislative measures failed, the state appointed officials called ''sitonai'', corn-buyers, who sought supplies wherever they could find them, raised public subscriptions for the necessary funds, introduced price reductions arid rationing. Despite the often used penalty of death for merchants and bureaucrats alike, the price of grain continued to rise when supplies were short and continued to fall when supply was plentiful.<ref name="Schuettinger_Rome">Robert L. Schuettinger and Eamonn F. Butler. "[[Forty Centuries of Wage and Price Controls]]", Chapter 1 - The Ancient World, p. 15-17, referenced 2010-09-25.</ref>
 
[[Wikipedia:Solon|Solon]], on taking office in [[Wikipedia:Classical Athens|Athens]] in 594 BC, instituted a partial debasement of the currency (there is some disagreement on this matter{{Fact|reason="Taken from Wikipedia, could not check this personally: Stanton G.R. Athenian Politics c800-500BC: A Sourcebook, Routledge, London (1990), page 61 note 4."}}). For the next four centuries the [[Wikipedia:Greek drachma|drachma]] had an almost constant silver content (67 grains of fine silver until [[Wikipedia:Alexander the Great|Alexander]], 65 grains after) and became the standard coin of trade in Greece and in much of Asia and Europe. Even after the Roman conquest of Greece in roughly the 2nd century BC, the drachma continued to be minted and widely used.<ref name="Britannica_money">Encyclopedia Britannica. [http://www.britannica.com/EBchecked/topic/389170/money "Money"], referenced 2010-09-25.</ref>
 
The Greek city-states were largely independent, though there was an awareness of Hellenic identity. Each city-state had its own coinage. There was an active trade in these currencies, and probably few laws limiting citizens of a given city-state to the use of their own money.<ref name="Edwards_Greece">James Rolph Edwards. [http://mises.org/journals/jls/4_1/4_1_7.pdf "Monopoly and Competition in Money"] (pdf), The Journal of Libertarian Studies Vol.IV, No.1, Winter 1980. Referenced 2010-06-26.</ref> Debasement of the currency either for state profit or for the accommodation of changes in the ratio was rare in Greek history (with the notable exception of [[Wikipedia:Dionysius I of Syracuse|Dionysius]] of Syracuse<ref name="Chodorov_Dionysius">Frank Chodorov. [http://mises.org/daily/3936 "Tyranny and Finance"], from ''Mises Daily'', December 30, 2009; excerpted from chapter 9 of [http://mises.org/resources/3091 The Rise and Fall of Society]. Referenced 2010-09-19.</ref><ref name="Bullock_Dionysios">Jesse Bullock Charles. [http://www.archive.org/details/economicessays029061mbp "Economic Essays (1936)"], p. 502-519. "''Having borrowed money from citizens of Syracuse and being pressed for repayment, he ordered all the coin in the city to be brought to him, under penalty of death. After taking up the collection, he restamped the coins, giving to each drachma the value of two drachmae, so that he was enabled to pay back both the original loan and the money he had ordered brought to the mint.''" Referenced 2010-09-19.</ref>). On the contrary, there are cases of actually raising the standard of the coinage for the greater prestige which a coinage of high intrinsic value seemed to offer. In the sixth century B.C., the Euboean unit was increased in a number of cities by about five grains, in emulation of an increase introduced by [[Wikipedia:Peisistratos|Pisistratus]] in Athens.<ref name="Groseclose_Greece">Elgin Groseclose. [http://mises.org/books/money.pdf "Money And Man - A Survey of Monetary Experience"] (pdf), Bimetallism and the Rise of the Gold Standard, p.146-147. Referenced 2010-06-25.</ref>
 
Banking, bank fraud and even banking crises were very well known. After the revolt against [[Wikipedia:Mithridates VI of Pontus|Mithridates]], a serious banking crisis in [[Wikipedia:Ephesus|Ephesus]] followed. The banking industry received here its first express, historically-documented privilege, which established a ten-year deferment on the return of deposits.<ref name="De_Soto_Greece">Jesús Huerta de Soto. [http://mises.org/books/desoto.pdf "Money, Bank Credit, and Economic Cycles"] (pdf). 2. Historical Violations of the Legal Principles Governing the Monetary Irregular-Deposit Contract, p. 41-51, referenced 2009-10-29.</ref>
 
==Modern Greece==
===Corruption===
===Corruption===
Greece is notorious for its high corruption. It is one of the most problematic [[Wikipedia:Organisation for Economic Co-operation and Development|OECD]] countries.<ref name="">Stavros Katsios, Ionian University. [http://www.asecu.gr/Seeje/issue06/katsios.pdf "The Shadow Economy and Corruption in Greece"] (pdf), ''South-Eastern Europe Journal of Economics'' 1 (2006). "''According to these estimates two southern European countries, Greece and [[Italy]], have an underground economy almost one third as large as the officially measured GNP, followed by Spain, Portugal and Belgium, with a shadow economy between 20-24 % of official GNP. The Scandinavian countries also have an unofficial economy between 18-20% of GNP, which is attributed mainly to the high fiscal burden. "Central" European countries like Ireland, the Netherlands, France, Germany and Great Britain have a smaller underground economy (between 13-16% of GNP) probably due to a lower fiscal burden and moderate regulatory restrictions. The lower underground economies are estimated to exist in countries with relatively low public sectors (Japan, the United States and Switzerland), and comparatively high tax morale (United States, Switzerland).''" Referenced 2010-09-24.</ref>
Greece is notorious for its high corruption. It is one of the most problematic [[Wikipedia:Organisation for Economic Co-operation and Development|OECD]] countries.<ref name="">Stavros Katsios, Ionian University. [http://www.asecu.gr/Seeje/issue06/katsios.pdf "The Shadow Economy and Corruption in Greece"] (pdf), ''South-Eastern Europe Journal of Economics'' 1 (2006). "''According to these estimates two southern European countries, Greece and [[Italy]], have an underground economy almost one third as large as the officially measured GNP, followed by Spain, Portugal and Belgium, with a shadow economy between 20-24 % of official GNP. The Scandinavian countries also have an unofficial economy between 18-20% of GNP, which is attributed mainly to the high fiscal burden. "Central" European countries like Ireland, the Netherlands, France, Germany and Great Britain have a smaller underground economy (between 13-16% of GNP) probably due to a lower fiscal burden and moderate regulatory restrictions. The lower underground economies are estimated to exist in countries with relatively low public sectors (Japan, the United States and Switzerland), and comparatively high tax morale (United States, Switzerland).''" Referenced 2010-09-24.</ref>
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* [http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html Europe's Web of Debt] by Bill Marsh, May 2010
* [http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html Europe's Web of Debt] by Bill Marsh, May 2010
* [http://mises.org/daily/4707 Economic Thought in Ancient Greece] by Jesus Huerta de Soto, September 2010
* [http://mises.org/daily/4707 Economic Thought in Ancient Greece] by Jesus Huerta de Soto, September 2010
* [http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6804156/Greece-defies-Europe-as-EMU-crisis-turns-deadly-serious.html Greece defies Europe as EMU crisis turns deadly serious] by Ambrose Evans-Pritchard, December 2009
[[Category:Countries]]
[[Category:Countries]]

Revision as of 16:10, 25 September 2010

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 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 EU); 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.[1]

Ancient Greece

In Athens, the constant shortages of grain and a need to import it from overseas caused its price to rise and fall according to supply. An army of grain inspectors, called Sitophylakes, was appointed to set the price of grain. "...to see to it first that the grain was sold in the market at a just price, that the millers sold meal in proportion to the price of barley, that the bakers sold bread in proportion to the price of wheat, that the bread had the weight they had fixed." When this and other legislative measures failed, the state appointed officials called sitonai, corn-buyers, who sought supplies wherever they could find them, raised public subscriptions for the necessary funds, introduced price reductions arid rationing. Despite the often used penalty of death for merchants and bureaucrats alike, the price of grain continued to rise when supplies were short and continued to fall when supply was plentiful.[2]

Solon, on taking office in Athens in 594 BC, instituted a partial debasement of the currency (there is some disagreement on this matter[citation needed]). For the next four centuries the drachma had an almost constant silver content (67 grains of fine silver until Alexander, 65 grains after) and became the standard coin of trade in Greece and in much of Asia and Europe. Even after the Roman conquest of Greece in roughly the 2nd century BC, the drachma continued to be minted and widely used.[3]

The Greek city-states were largely independent, though there was an awareness of Hellenic identity. Each city-state had its own coinage. There was an active trade in these currencies, and probably few laws limiting citizens of a given city-state to the use of their own money.[4] Debasement of the currency either for state profit or for the accommodation of changes in the ratio was rare in Greek history (with the notable exception of Dionysius of Syracuse[5][6]). On the contrary, there are cases of actually raising the standard of the coinage for the greater prestige which a coinage of high intrinsic value seemed to offer. In the sixth century B.C., the Euboean unit was increased in a number of cities by about five grains, in emulation of an increase introduced by Pisistratus in Athens.[7]

Banking, bank fraud and even banking crises were very well known. After the revolt against Mithridates, a serious banking crisis in Ephesus followed. The banking industry received here its first express, historically-documented privilege, which established a ten-year deferment on the return of deposits.[8]

Modern Greece

Corruption

Greece is notorious for its high corruption. It is one of the most problematic OECD countries.[9]

According to Transparency International, in 2008, more than 13% of Greeks resorted to giving "fakelakia" (or little envelopes), paying an estimated €750 million in bribes to public and private officials, €110 million more than the previous year. The amount equated to an average of 1,450 euros [US $1,850] in bribes per family. The majority of bribes, 60 percent of the total, are "related to doctor's fees, tax evasion and building permits."[10]

Financial crisis

In October 2009, the Greek government deficit for 2008 was revised from 5.0% of GDP (the ratio reported by Greece, and published and validated by Eurostat in April 2009) to 7.7% of GDP. At the same time, the Greek authorities also revised the planned deficit ratio for 2009 from 3.7% of GDP (the figure reported in spring) to 12.5% of GDP, reflecting a number of factors (the impact of the economic crisis, budgetary slippages in an electoral year and accounting decisions).[11]

European Central Bank President Jean-Claude Trichet pledged in January, 2009, that it would not loosen lending requirements "for the sake of any particular country." However, credit-rating downgrades threatened to render Greek government bonds ineligible as collateral and exacerbate the crisis. At the end of April, 2010, Standard & Poor’s cut Greece’s sovereign rating to junk status, below the minimum BBB- required by the ECB from at least one major rating company.[12]

On May 3rd 2010, the European Central Bank has suspended the minimum credit rating threshold in the requirements for the Eurosystem’s credit operations in the case of marketable debt instruments issued or guaranteed by the Greek government.[13] That was a day after euro-zone countries and the International Monetary Fund agreed to extend an unprecedented €110 billion ($147 billion) rescue package to the debt-laden country.[14]

See also: The Great Recession

Economical characteristics

  • Currency: Euro (ISO code: EUR)
  • Central bank discount rate: 3% (31 December 2008)[1]
  • Commercial banks lending rate: 8.65% (31 December 2008)[1]
  • Stock of money (M1): $NA[1]
  • Quasi money (with M1 makes M2): $NA[1]


Statistics

Statistic / Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
GDP (million USD)[15] 134 408 125 558 131 032 147 388 193 465 230 757 245 797 267 479 312 302 355 876
Govt. debt (% of GDP)[16] 108.473 123.547 126.354 127.172 123.441 126.201 125.440 117.994 114.100
Govt. revenue (% of GDP)[17] 39.660 41.549 39.478 39.058 38.007 36.773 36.885 37.981 39.048
Govt. expenses (% of GDP)[18] 40.532 44.196 43.537 42.821 42.215 42.566 41.382 40.272 41.808
Debt to revenue (years) 2.735 2.973 3.201 3.256 3.248 3.432 3.401 3.107 2.922

References

Note: statistical data was rounded. Debt to revenue is calculated by dividing the two variables from their original ('unrounded') values. It represents how long it would a government take to repay its entire debt if it used its whole revenue for this purpose.

  1. ↑ 1.0 1.1 1.2 1.3 1.4 Cite error: Invalid <ref> tag; no text was provided for refs named CIA_GR
  2. ↑ Robert L. Schuettinger and Eamonn F. Butler. "Forty Centuries of Wage and Price Controls", Chapter 1 - The Ancient World, p. 15-17, referenced 2010-09-25.
  3. ↑ Encyclopedia Britannica. "Money", referenced 2010-09-25.
  4. ↑ James Rolph Edwards. "Monopoly and Competition in Money" (pdf), The Journal of Libertarian Studies Vol.IV, No.1, Winter 1980. Referenced 2010-06-26.
  5. ↑ Frank Chodorov. "Tyranny and Finance", from Mises Daily, December 30, 2009; excerpted from chapter 9 of The Rise and Fall of Society. Referenced 2010-09-19.
  6. ↑ Jesse Bullock Charles. "Economic Essays (1936)", p. 502-519. "Having borrowed money from citizens of Syracuse and being pressed for repayment, he ordered all the coin in the city to be brought to him, under penalty of death. After taking up the collection, he restamped the coins, giving to each drachma the value of two drachmae, so that he was enabled to pay back both the original loan and the money he had ordered brought to the mint." Referenced 2010-09-19.
  7. ↑ Elgin Groseclose. "Money And Man - A Survey of Monetary Experience" (pdf), Bimetallism and the Rise of the Gold Standard, p.146-147. Referenced 2010-06-25.
  8. ↑ Jesús Huerta de Soto. "Money, Bank Credit, and Economic Cycles" (pdf). 2. Historical Violations of the Legal Principles Governing the Monetary Irregular-Deposit Contract, p. 41-51, referenced 2009-10-29.
  9. ↑ Stavros Katsios, Ionian University. "The Shadow Economy and Corruption in Greece" (pdf), South-Eastern Europe Journal of Economics 1 (2006). "According to these estimates two southern European countries, Greece and Italy, have an underground economy almost one third as large as the officially measured GNP, followed by Spain, Portugal and Belgium, with a shadow economy between 20-24 % of official GNP. The Scandinavian countries also have an unofficial economy between 18-20% of GNP, which is attributed mainly to the high fiscal burden. "Central" European countries like Ireland, the Netherlands, France, Germany and Great Britain have a smaller underground economy (between 13-16% of GNP) probably due to a lower fiscal burden and moderate regulatory restrictions. The lower underground economies are estimated to exist in countries with relatively low public sectors (Japan, the United States and Switzerland), and comparatively high tax morale (United States, Switzerland)." Referenced 2010-09-24.
  10. ↑ Lydie Gerboin, Transparency International. "Bribes in Greece", Transparency Watch, February 2009. Referenced 2010-09-24.
  11. ↑ European Comission. Report on Greek Government Deficit and Debt Statistics (pdf), European Comission, January 2010. Referenced 2010-09-24.
  12. ↑ Simon Kennedy. "Trichet May Need to Rewrite ECB Rules to Tame Greek Threat", Bloomberg, May 2010. Referenced 2010-09-24.
  13. ↑ European Central Bank. "3 May 2010 - ECB announces change in eligibility of debt instruments issued or guaranteed by the Greek government" , Press Release, 3 May 2010. Referenced 2010-09-24.
  14. ↑ Geoffrey T. Smith. "ECB Suspends Rating Limits on Greek Debt", The Wall Street Journal, May 3, 2010. Referenced 2010-09-24.
  15. ↑ World Bank. "Greece: GDP", from World Bank Data. Referenced 2010-09-21.
  16. ↑ World Bank. "Greece: government debt", from World Bank Data. Referenced 2010-09-21.
  17. ↑ World Bank. "Greece: government revenue", from World Bank Data. Referenced 2010-09-21.
  18. ↑ World Bank. "Greece: government expenses", from World Bank Data. Referenced 2010-09-21.

External links

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