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The economy of Greece attracts the attention of global economists because of the historical developments and downturns ascribed to the state. 2007 is a signature year for the country because Greece experienced a financial crisis that weakened its economy. The Great recession weakened the Greek economy structurally. Economists blamed the government for the excessive debt that jeopardized the economy. The Eurozone plays a significant role towards the stabilization of the Greek economy. Despite efforts to make sure that the citizens experience a stable financial future, the country faces challenges that threaten its possibility to have a prosperous economy in the immediate future. Despite the fact that Greece’s economy had realized an improvement in recent decades owing to tourism and industrial development, the country currently faces an economic crisis that is quite severe. The monetary currency in the country since 2002 is the Euro that replaced the Drachma. The country’s preparation to host the 2004 Olympic games gave the Greek economy some impulse. Currently, however, the country is in a critical debt crisis faces numerous challenges including, tax invasion, high unemployment rates (25% as at December 2012) and low development rates (Knight 45). As at 2012, Greece stood as the 15th largest economy among the European Union’s member states and was the 34th largest country economically in light of nominal gross domestic product. The county’s most essential economic industries are merchant shipping and tourism. The country receives close to 15 million tourists annually, making it the 16th most visited country globally and the 7th in the EU (Knight 51). Greece has the world’s largest merchant marine, covering 16% of the globe’s cumulative capacity. This paper discusses the economy of Greece today.
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Currently, the economy of Greece is rated 46th globally, with a GDP of $194.851 billion every year. Despite the average performance of the country’s economy, Greece struggles with a huge debt that hangs over the heads of its citizens. Members of the Eurozone are in constant talks to consider lifting the debt owed to them by Greece. In fact, the current positive health of the Greek economy is credited with the role played by most European countries, especially the United Kingdom. Greece is classified as a developed country with robust industrial and agricultural sectors. The industries in Greece thrive because of the favorable business environment prepared by the laws that support business. The Government also issues incentives to farmers to boost agricultural production.
In as much as Greece is showing positive progress economically, there are a lot of doubts about its future because of the political developments in the continent. A lot of economic uncertainty faces the country because of the outstanding debts and the economic obligations that the government is expected to fulfill by belonging to the Eurozone (Knight 96). Currently, the economy of Greece is on the verge of dropping following the exit of Britain from the European Union. The political and economic implications of Brexit demand the government to develop counter-strategies to cushion the state from a possible recession. The potential devaluation of the pound, in the long run will affect Greek exports, real estate and tourism. Most Greek households will also experience income challenges which will weaken the economy further.
The Greek economy depends heavily on real estate, tourism and exports to other countries, especially the United States and Britain. Most of the real estate investments are established by tycoons from the United States and Australia, which translate to an overall investment of 60 percent. The real estate, however, is threatened by the recent weakening of the Euro against the British Pound and the US Dollar. Most tourists visiting Greece are from the United Kingdom and Germany (Hellebrandt 124) Greece experiences the challenge of unemployment. Millions of Greece citizens have left the country over the last six years in search of better education and decent employment opportunities. The United Kingdom is the most preferred destination for Greek immigrants. The educational discounts accorded to Greek nationals make it easy for them to access discounted education across EU countries.
The economic success of Greece depends heavily on the stability of the Union. The recent shake-up that was experienced due to the proposal of Britain to exit the group is a negative signal to Greece’s economic stability. The country should also establish trade partnerships with other nations especially in Africa and the Middle East which have various untapped potentials (Kalyvas 112). For the Greek economy to improve, it is important to develop a plan that facilitates the eradication of poverty and unemployment. Besides, the government should prepare its systems for economic independence if the Eurozone collapses. Greece should also negotiate with other countries for better terms of repaying their debt. The country should show the goodwill and commitment to service the debt. The commitment enhances the economic bonds between Greece and other nations. It is crucial for the country to promote the spirit of entrepreneurship and innovation to reduce the effects of unemployment.
In as much as the Greek economy is advanced, it is important to shield it from a potential fall because of political uncertainty and the accumulated debt. The country’s administration should engage the services of policy experts that will spearhead the process of healing the Greek economy. The government should also avoid heavy borrowing as this will pile up the country’s debt. Lastly, the government should empower its citizens to engage in industrialization as this will grow the economy at the household level, which will also translate in improving the overall financial position of the country.
- Hellebrandt, Thomas. Income Inequality Developments in the Great Recession. Berlin: DIW, 2014. Internet resource.
- Kalyvas, Stathis N. Modern Greece: What Everyone Needs to Know. New York: Oxford University Press, 2015. Print.
- Knight, Daniel M. History, Time, and Economic Crisis in Central Greece. 2015. Print.