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 COUNTRY INFORMATION

Geography

Area: 131,957 sq. km. (51,146 sq. mi.; roughly the size of Alabama).Major cities: Capital--Athens. Greater Athens (pop. 3,566,060), municipality of Athens (772,072), Greater Thessaloniki (pop. 1,057,825), municipality of Thessaloniki (363,987), Piraeus (175,697), Greater Piraeus (466,065), Patras (171,616), Iraklion (137,711), Larissa (126,076).Terrain: Mountainous interior with coastal plains; 1,400-plus islands.Climate: Mediterranean; mild, wet winter and hot, dry summer.

People

Population (2010 est.): 11,295,002. (Legal immigrants make up approximately 6.95% of the population.)Population growth rate (2010 estimated): 0.1%.Languages: Greek 99% (official), Turkish, others. Albanian is spoken by approximately 700,000 Albanian immigrants. English is the predominant second language.Religions: Greek Orthodox (approximately 98% of citizens), with Muslim (1.5%), Jewish, Catholic, Protestant, and other religious communities.Education: Years compulsory--9. Literacy--97.5%. All levels are free.Health: Infant mortality rate--5.43/1,000. Life expectancy--male 77.69 years, female 82.35 years.Work force (2009 estimated): 5.0 million.

Government

Type: Parliamentary republic.Independence: 1830. National Day: March 25 (1821).Constitution: June 11, 1975, amended March 1986, April 2001, May 2008.Branches: Executive--president (head of state), prime minister (head of government). Legislative--300-seat unicameral Vouli (parliament). Judicial--Supreme Court, Council of State.Political parties: Panhellenic Socialist Movement (PASOK), New Democracy (ND), Communist Party of Greece (KKE), Popular Orthodox Rally (LAOS), and Coalition of the Left (SYNASPISMOS).Suffrage: Universal and mandatory at 18.Administrative subdivisions: 13 peripheries (regional districts); 325 municipalities; two wider metropolitan area administrative councils to encompass the whole of the Attica region and the Thessaloniki agglomeration.

Economy as of 2011 

GDP (2010 forecast): €236 billion (about $315 billion).Per capita GDP (2009 estimated): $30,035.Growth rate (2010 forecast): -4.00%.Inflation rate (2010 forecast): 4.6%.Unemployment rate (annual average, 2010 forecast): 11.8%.Natural resources: Bauxite, lignite, magnesite, oil, marble.Agriculture (5.4% of GDP): Products--sugar beets, wheat, maize, tomatoes, olives, olive oil, grapes, raisins, wine, oranges, peaches, tobacco, cotton, livestock, dairy products.Manufacturing (21.3% of GDP): Types--processed foods, shoes, textiles, metals, chemicals, electrical equipment, cement, glass, transport equipment, petroleum products, construction, electrical power.Services (73.3% of GDP): Transportation, tourism, communications, trade, banking, public administration, defense.Trade: Exports (2009 estimated)--$21.37 billion: manufactured goods, food and beverages, petroleum products, cement, chemicals. Major markets--Germany, Italy, Bulgaria, U.S., U.K., Romania. Imports (2009 estimated)--$64.27 billion: basic manufactures, food and animals, crude oil, chemicals, machinery, transport equipment. Major suppliers--Germany, Italy, France, Netherlands, Russia.

GENERAL ECONOMY 2011

 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 1997-2007, Greece averaged 4% GDP growth, almost twice the European Union (EU) average. 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 2.0% 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 (recently revised upwards by Eurostat to 15.4% of GDP from 13.6% of GDP), mounting aging and 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 recently 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 the Prime Minister 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. Greece has committed to reduce its deficit to under 3% of GDP (the ceiling under the EU's Maastricht Treaty) by 2014.The global crisis and the consecutive recession caused an increase in unemployment to 9.4% in 2009 (from 7.7% in 2008). Unemployment is expected to continue to increase, reaching 11.8% in 2010, 14.6% in 2011, and 14.8% in 2012, before beginning to decrease in 2013 to 14.3%.

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 has increased, leading to a net FDI outflow in some years.Greece has a predominately service economy, which (including tourism) accounts for over 73% of GDP. Almost 9% of the world's merchant fleet is Greek-owned, making the Greek fleet the largest in the world. 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 about 5% 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 2009 imports totaled $64 billion against exports of $21 billion. Tourism and shipping receipts together with EU transfers make up for much of this deficit.European Union (EU) Membership Greece has been a major net beneficiary of the EU budget; in 2009, EU transfers accounted for 2.35% of GDP. From 1994-99, about $20 billion in EU structural funds and Greek national financing were spent on projects to modernize and develop Greece's transportation network in time for the Olympics in 2004. The centerpiece was the construction of the new international airport near Athens, which opened in March 2001 soon after the launch of the new Athens subway system.EU transfers to Greece continue, with approximately $24 billion in structural funds for the period 2000-2006. The same level of EU funding, $24 billion, has been allocated for Greece for 2007-2013. These funds contribute significantly to Greece's current accounts balance and further reduce the state budget deficit. EU funds will continue to finance major public works and economic development projects, upgrade competitiveness and human resources, improve living conditions, and address disparities between poorer and more developed regions of the country. The EU plans to phase them out in 2013.U.S.-Greece Trade In 2008, the U.S. trade surplus with Greece was $1.1 billion.

There are no significant non-tariff barriers to American exports. U.S. exports to Greece reached $2.4 billion, accounting for 2.7% of Greece's total imports in 2008. The top U.S. exports remain defense articles, although American business activity is expected to grow in the tourism development, medical, construction, food processing, and packaging and franchising sectors. U.S. companies are involved in Greece's ongoing privatization efforts; further deregulation of Greece's energy sector and the country's central location as a transportation hub for Europe may offer additional opportunities in electricity, gas, refinery, and related sectors.

GREECE RELATIONS

Greece is an important partner in many of today's highest U.S. policy priorities. As a leader in the region, Greece has also been an ally to the U.S. in promoting Balkan stability and economic development, supporting Turkey's bid for accession to the European Union, and supporting the diversification of Europe's energy supplies. Greece's geostrategic position also makes it an important ally in engagement and dialogue with the Muslim world. As an entry point into the Schengen visa area for migrants from the Middle East, North Africa, and Southwest Asia, Greece shares an interest both in humanitarian treatment of migrants and in supporting the development of conditions in their home countries that would ease the pressures for migration. Serving in the chairmanship of the Organization for Security and Cooperation in Europe (OSCE) in 2009, Greece navigated these problems and assisted in mediations following the conflict between Russia and Georgia.An estimated three million Americans resident in the United States claim Greek descent. This large, well-organized community cultivates close political and cultural ties with Greece. There are approximately 90,000 to 100,000 American citizens resident in Greece. Greece has the seventh-largest population of U.S. Social Security beneficiaries in the world.

SOURCE:  BUREAU OF EUROPEAN AND EURASIAN AFFAIRS

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