Greece, according to figures released by the North Atlantic Treaty Organization (NATO), spent around 2.4% of its GDP on defence in 2015 and 2016, a 7.2% increase in defence spending over that of 2014 (or some an additional 0.2% of the GDP). Overall in terms of this measure, Greece ranks 2nd out of the 28 NATO members, behind only the US and being one of the few member states that achieves the NATO’s target of 2% of the GDP spending in military expenditure.

On the 23rd of April 2010, four decades after the restoration of democracy in 1974, the Greek government requested the activation of a European Union (EU)/International Monetary Fund (IMF) bailout package, as the private credit markets requested an unsustainable interest rate for the Greek bond. The end of the most prosperous economic period of contemporary Greece, was hence officially announced. After 15 consecutive years of sustained economic growth (Greek economy averaged growth of about 4% per year between 2003 and 2007), the belief that the Greek economy would continue to nurture, simply because a whole generation of Greeks had never seen a year of recession, was widespread. Currently Greece is facing a situation that can be fairly characterized as one of the most troubled socio-economic periods of its modern history. It is indicative that the economy in 2013, contracted by 26%, compared with the pre-crisis level of 2007. According to a report provided by the Greek Statistical Authority, in the 3rd quarter of 2016, the GDP (in terms of current prices) increased by 0.9% in comparison with the 2nd quarter of 2016, while it increased by 2% in comparison with the 3rd quarter of 2015.

The economic recession in Greece, was mainly a result of Athens’ failure to address a growing budget deficit for a large number of years. The Greek economy has a public sector which accounts for approximately 40% of the Gross Domestic Product (GDP). Additionally, in Greece, tax evasion is widespread. Along with smuggling, it is estimated that it costs the country every year some €15-20 billion in potential state revenues. The main reason for this tax evasion culture, is that a high tax wedge on labour income, generates tax evasion and informal economic activity. Therefore the state cannot secure enough money to fund the somewhat ‘oversized’ public sector and in response slashes public sector salaries and raises new taxes, generating more tax evasion, thus creating a vicious endless circle.

As a result of the economic recession, Greece has recorded exceptionally high unemployment rates. It is indicative that in August 2016, the unemployment rate reached 23.3%, significantly increased when compared to pre-2007 levels, but marginally decreased compared to 2015, when the unemployment rate reached 24.9% (peak value of 2015).

In 2015, Greece’s total exports were estimated at about 26 billion Euros, while imports reached some 44 billion, resulting in a negative trade balance of 18 billion Euros. The top export destinations for Greek products/services in 2015, were Italy (11.4% of total exports), Germany (7.3% of total exports), Turkey (6.6% of total exports), Cyprus (6% of total exports) and Bulgaria (5.2% of total exports). On the other hand, the five major suppliers of 2015 imports, were Germany (10.8% of total imports), Italy (8.3% of total imports), Russia (7.8% of total imports), China (5.9% of total imports) and the Netherlands (5.5% of total imports). In 2015, Greece mainly imported energy products, as well as machinery and transport equipment, while on the other hand, exports included energy products and food, drinks and tobacco related products.

Despite the fact that the Greek economy continues in recession (2017), there are some specific aspects of the local socioeconomic scene that remain strong. The indigenous workforce is one of them. When compared to other European workforces, the Greek labour force has as an advantage that its cost is low in relation to the degree of its specialization, especially in cost intensive areas, such as Human Resources, Energy, IT and Construction. Additionally, the labour skills and qualifications of Greek employees manage to continuously match the changing conditions and labour market current needs, through a variety of vocational training and re-training programmes carried out at the local, regional and national levels.

Despite this fact, it seems that Greece still needs to cover a long distance to somehow correct its business environment and to persuade foreign entities to invest in the country. This is delineated by the country’s mediocre scores in several international indicators measuring the ‘openness’ of a country’s economic and business environments. Greece ranked 61st out of 190 countries in the World Bank’s Doing Business 2017 report, 127th out of 180 countries in the 2017 Heritage Foundation’s Index of Economic Freedom and 40th out of 128 in the 2016 Global Innovation index.




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Doing Business report

(61 out of 190)


Index of Economic Freedom

(127 out of 180)


Global Innovation index

(40 out of 128)